Part 3 of 4 in a series drawn from the Barnes & Thornburg white paper "False Claims Act and Criminal Enforcement in the Tariff Context: Practical Guidance for Companies, Corporations, and Executives"

The Department of Justice (DOJ)'s recent customs enforcement actions span aluminum extrusions, tungsten carbide tooling, office chairs, forklifts, quartz countertops, jewelry, wood flooring, plastic resin, and cargo vans. The products vary widely. The patterns do not.

Four threads run through these matters.

Nationality Is Not a Shield

The False Claims Act (FCA) — the government's main civil fraud statute, which now drives much of its customs enforcement — reaches any "person" who knowingly submits or causes the submission of false claims. Courts have recognized that this includes foreign companies operating in U.S. import chains. The criminal smuggling and conspiracy statutes apply to anyone whose conduct affects U.S. commerce, regardless of nationality.

The UBS Gold case, announced in November 2025, shows what that means in practice. DOJ charged an Indonesian jewelry company, its co-owner, and two employees — an Indonesian national and an Italian citizen — in a multiyear scheme alleged to have evaded more than $86 million in duties on over $1.2 billion in imports, routed through Jordan to exploit a free trade agreement. Two defendants were arrested in the United States.

The case is notable less for the amount than for the posture: DOJ charged a foreign company criminally rather than pursuing a civil settlement, and named individual foreign nationals who now face arrest risk on entry to the United States. Foreign manufacturers and suppliers have also faced direct civil exposure for participating in false declarations by their U.S. customers.

CBP Penalties Are Not the Ceiling

Many importers treat a CBP penalty proceeding as the outer limit of their exposure. That is the process most compliance teams know: CBP assesses a penalty under Section 1592 of the Tariff Act, and the parties negotiate. Island Industries foreclosed the assumption that it ends there. The Ninth Circuit held that the Tariff Act penalty regime does not displace the FCA, meaning both can be pursued at once — CBP penalties on one track and, separately, FCA liability that triples the government's losses and adds a penalty for every entry involved.

The differences compound the problem. The FCA reaches back as far as 10 years, against five for a Tariff Act penalty. And because a whistleblower complaint is filed under seal while the government investigates — meaning the company does not know it exists — years can pass before the company learns it is a defendant. Tariff Act penalties must also be brought by the government itself, in a specialized trade court. An FCA case can be filed by a competitor, in any federal court.

The Ceratizit USA settlement shows the reach. DOJ alleged conduct running from June 2015 through March 2024 — tariff classification codes that brought the duty rate to zero, Chinese products routed through Taiwan and declared as Taiwanese, and failures to mark goods with their country of origin. The DOJ alleged nearly nine years of  noncompliance, with much of it predating the current trade environment entirely. The whistleblower received approximately $9.75 million.

Executives Are Often Named

This is the thread companies most often underestimate. Across recent matters, executives have been charged criminally alongside their companies and named personally in civil settlements — three executives in the Endless Sales/Octane Forklifts case, a company president in the Allied Stone settlement, a co-owner and two employees in UBS Gold.

The Global Office Furniture complaint is the one to sit with. DOJ individually named the founder and president, alleging that after he became aware of a government investigation, he directed employees to delete relevant emails, reviewed employees' desks for potentially incriminating notes, and had the company's IT provider implement a retroactive 60-day auto-delete function for company email.

Conduct after the investigation starts can be worse than the conduct that prompted it.

Self-Disclosure Protects the Company, Not the Executive

The MGI International matter captures both the benefit and the limit of self-disclosure. MGI self-disclosed to DOJ and CBP that it had failed to declare accurate country-of-origin and valuation information on entries of Chinese-origin plastic resin, then investigated thoroughly, shared a damages analysis with the government, disciplined personnel, and improved its procedures. The civil resolution was $6.8 million, and DOJ chose not to bring criminal charges against the company, crediting the payment and the cooperation.

Its former chief operating officer was charged anyway, for instructing subordinates to misrepresent manufacturer and origin information. He pleaded guilty in December 2025. The corporate declination did not extend to him.

Timing compounds the risk. Coming forward voluntarily earns leniency only if the company gets there first: Grosfillex received no credit for its disclosure at all, because a whistleblower had already filed.

What Tends to Draw Scrutiny

Certain circumstances reliably attract attention: sudden changes in classification patterns that produce materially lower duty rates, supply chains routed through third countries where the processing done there may be too minimal to legally change the goods' country of origin, and gaps between declared customs values and related-party transfer pricing.

Two are easy to miss. A competitor undercutting the company on price may be evading duties — but may equally be positioning to file a whistleblower complaint in the other direction. And DOJ has publicly emphasized its use of data analytics, including CBP's partnerships with AI-based supply chain technology firms, to detect evasion patterns before any human raises a concern.

Where to Start

Most of these matters began with a competitor, an employee, or a CBP inquiry — not with a decision by the company to come forward. The window for controlling the narrative tends to close before companies know it exists.

Our white paper, False Claims Act and Criminal Enforcement in the Tariff Context, works through these cases in detail, along with the full set of red flags signaling enforcement risk and the specific indicators that a civil inquiry has become a criminal one. Appendix E provides a table of 18 recent customs-related FCA enforcement actions from 2023 through 2026, organized by defendant, resolution amount, fraud category, and key allegations — a fast way to see which industries and sourcing profiles are already drawing attention.