DOJ and DHS launch Trade Fraud Task Force: Heightened enforcement focus on tariff evasion and customs fraud

The Task Force

The Trade Fraud Task Force aims to increase collaboration and data-sharing among the DOJ’s Criminal and Civil Divisions as well as the Department of Homeland Security’s (DHS) enforcement arms at U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI). The Task Force will target parties potentially evading tariffs, smuggling prohibited goods, and violating intellectual property rights, with numerous and expansive enforcement actions under the Tariff Act of 1930, the False Claims Act (FCA), and criminal statutes.

The Task Force announcement issued a call-to-arms to “domestic industries that are most harmed by unfair trade practices and trade fraud.” The Task Force also included a link to report potential violations through the DOJ’s Corporate Whistleblower Program. It also “encourages whistleblowers to utilize the qui tam provisions of the False Claims Act.” 

Latest signal of the Administration’s focus on trade fraud

The Task Force announcement is one of many indications over the last nine months that the Administration is highly focused on identifying and prosecuting trade fraud – and is putting resources behind that focus. President Trump announced this focus at his Inauguration, through an America First Trade Policy Executive Order. The DOJ, DHS, and CBP have since taken several steps to set enforcement priorities and organize resources in alignment with the policy.

In May 2025, the DOJ's Criminal Division released a memorandum, titled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime,” in which it designated trade and customs fraud, among other areas, as “high-impact” enforcement priorities for the Administration. At the same time, the DOJ also revised its Corporate Whistleblowers Awards Pilot Program to include “trade, tariff, and customs fraud” as an approved subject matter for submission eligibility. 

Also in May, CBP stated that declaring incorrect values on customs forms is considered trade evasion and that the agency will “pursue any violations to the fullest extent possible” – providing a link to CBP's trade violation reporting system portal.

The Administration’s commitment to enforcement is backed by an increase in DOJ resources. In July 2025, to support increased tariff enforcement, the DOJ announced the creation of the Market, Government, and Consumer Fraud Unit within the Criminal Division’s Fraud Section. The new unit combines prosecutors from the Market Integrity and Major Frauds Unit – which previously focused on market manipulation and procurement fraud – and a significant number of prosecutors from the former Consumer Protection Branch of the Civil Division, who also handled criminal cases.

False Claims Act as a key enforcement tool

The Administration made clear in the Task Force announcement, as well as in other trade-related enforcement initiatives in recent months, that it intends to pursue all available means to root out trade fraud, including both criminal prosecution and civil enforcement. One of the primary enforcement tools at the Administration’s disposal is the FCA. The Task Force press release touted four recent FCA settlements in trade fraud cases and included an explicit request for whistleblowers “to utilize the qui tam provisions of the False Claims Act to alert the government to credible allegations of fraud.”

As we discussed in a July 2025 client alert, the Ninth Circuit’s recent decision in Island Industries Inc. v. Sigma Corporation reaffirmed that the qui tam provisions of the FCA serve as a separate enforcement mechanism for customs fraud. Combined with the Administration’s prioritization of customs fraud enforcement and its solicitation of whistleblowers and qui tam suits, the ruling is likely a harbinger of increased trade-related FCA activity as companies navigate new and evolving tariff regimes. At the same time, companies may face criminal scrutiny stemming from the DOJ Criminal Division's increased focus on (and capacity to address) trade-related fraud.

Key takeaways for companies – In a time of uncertainty

On the same day the Administration announced the Trade Fraud Task Force, the U.S. Court of Appeals for the Federal Circuit struck down tariffs imposed by the President using the International Emergency Economic Powers Act (IEEPA). The Supreme Court has agreed to review the decision on an expedited basis. In the meantime, these tariffs remain in place, and companies engaged in importing or cross-border trade face increased scrutiny.

To mitigate possible risks, businesses should consider the following:

• Audit trade compliance practices: Confirm classification, valuation, country-of-origin, and tariff determinations are accurate and documented.
• Validate supply chain records: Ensure vendor and supplier data supports customs entries.
• Prepare a customs compliance “manual”: Develop and follow detailed import compliance procedures – this is critical to avoiding inadvertent errors in the customs process.
• Reinforce internal controls: Strengthen oversight of entry filings and record retention.
• Update escalation protocols: Establish clear procedures for identifying and addressing potential violations, including voluntary disclosure considerations.
• Train key personnel: Educate staff in trade, operations, and compliance roles on evolving enforcement risks.
• Review supplier and customer agreements: Make any adjustments necessary to allocate the risk/benefit of changes to the applicable tariffs to minimize the possibility of time-consuming and costly disputes down the road.

Hogan Lovells is well-positioned to assist clients with all of these initiatives. Please be in touch with the identified contacts if there are questions or if we can otherwise be of assistance.

Authored by Mitch Lazris, Matt Sullivan, Evans Rice, Mike Theis, Josh Gelula, Michael Jacobson, Josh Kurland, Craig Lewis, Jonathan Stoel, and Jared Wessel.