DOJ Targets Foreign Companies in Large-Scale Duty and Tariff Fraud

The U.S. Department of Justice (DOJ) has ramped up its enforcement of trade-related fraud, reflecting a broader alignment with the Trump administration’s priorities of protecting domestic manufacturing and reshoring economic value. Recent charges against an Indonesian jewelry company, its owner and two foreign employees for evading over $86 million in duties and tariffs serve as a recent example of the broader trend of aggressive actions by the DOJ that target both domestic and foreign actors involved in customs violations.

In their recent Client Alert, Morrison Cohen Partner & Chair of the Executive Committee Y. David Scharf, Partner Genny Ngai and Associate Christina Gotsis discuss the DOJ’s evolving enforcement strategies, the serious risks facing businesses engaged in cross-border transactions, and how businesses can strengthen compliance.

Key Takeaways:

• The DOJ is pursuing both criminal and civil claims for customs violations, including wire fraud conspiracy and False Claims Act violations.
• Foreign companies are not immune to U.S. jurisdiction if they affect U.S. commerce, as demonstrated in recent cases involving imports through third-party countries like Jordan.
• Voluntary disclosure may mitigate some liability but does not shield companies from potential criminal prosecution or broader civil claims.
• Whistleblowers continue to be a significant factor in triggering government investigations and settlements.

Morrison Cohen’s White Collar & Regulatory Enforcement Practice and Government Strategies & Controversies Group are available to guide clients through the current trade enforcement landscape, helping them assess and navigate potential civil and criminal exposure.

Read more in the Client Alert below.