A direct message to owners, CEOs, presidents, CFOs, and heads of sales and trade compliance.

You already know. You have looked at a competitor’s price and known it was not possible. Not aggressive — impossible. Not a thinner margin, not a better freight contract, not a smarter factory. A landed cost that cannot be reached by anyone paying what you pay at the border.

You have told yourself it was volume. You have told yourself they must have a supplier arrangement you do not have. You have watched a bid go to a company whose number made no sense, and you have gone back to your own people and asked them to find another two points somewhere.

Stop absorbing it. It is not your inefficiency. In a great many cases it is fraud, and there is a federal statute that lets you do something about it. Tariff Fraud is rampant and increasing over time. You abide by the law and they don’t but you can stop them. The vehicle is the whistleblower law The False Claims Act.

What your competitor is doing

There are three lies told on customs paperwork, and every one of them shows up as a price you cannot match.

They lie about where it was made — Chinese goods routed through Malaysia, Thailand, Taiwan, or Vietnam and relabeled, so the antidumping, countervailing, and Section 301 duties never attach.

They lie about what it is — the same product described one way in the sales catalog and another way on the entry summary, moved from a dutiable tariff line to a free one.

They lie about what it is worth — a second, lower invoice for customs, with the real value moved onto a separate bill for tooling, testing, or services.

Antidumping rates are not rounding errors. Chinese wooden bedroom furniture carried a 216 percent antidumping duty. The welded pipe fittings in the Sigma case carried 182.9 percent. At those rates, evasion does not improve a margin. It manufactures one out of nothing, and it hands your competitor a weapon you are not allowed to carry.

You do not have to be an insider to stop it

This is the part most business owners have never been told. The False Claims Act does not require you to work for the company that is cheating. Competitors have brought these cases and won them.

Island Industries v. Sigma Corp. A domestic pipe fittings manufacturer filed under seal in 2017 against six of its competitors. The Justice Department declined to intervene. Island pressed the case alone, to a jury, and won. The jury found more than $8 million in damages; the court trebled them and added penalties, for a judgment of roughly $26 million. The Ninth Circuit affirmed on June 23, 2025, and denied rehearing.

How did Island find out? A sales manager testified that he began researching import rules because Island’s prices kept being undercut by product from China. He had no trade law training. Within twenty-four hours, using ordinary internet searches and a call to an analyst at the Commerce Department, he determined that his competitor’s product was probably covered by an antidumping order. The jury also heard that Sigma described the goods as welded outlets in its own catalog and on its website — and as steel couplings on its customs forms.

Three of the other defendants settled with Island. Two went bankrupt.

Toyo Ink SC Holdings. A competitor brought the case. The company paid $45 million plus interest in December 2012 to resolve allegations that it declared pigment made in China and India as Japanese or Mexican in origin. The relator’s award was reported at nearly $7.9 million.

Evolutions Flooring. A competitor, Urban Global LLC, filed the qui tam. In March 2025 the importer and its owners paid approximately $8.1 million over Chinese multilayered wood flooring declared as originating elsewhere. Urban Global received $1,215,000.

Home Furnishings Resource Group. University Loft Company, a competitor, filed suit in the Western District of Texas over Chinese wooden bedroom furniture misclassified as non-bedroom furniture to escape the 216 percent duty.

Tungsten Heavy Powder. Resolved in 2021 for more than $5.6 million, with 17 percent divided between two relators — one a former employee, the other a direct industry competitor.

What it means for you

Under the False Claims Act, a private party who brings the case is called a relator and shares in what the government recovers: 15 to 25 percent where the government intervenes, 25 to 30 percent where it declines and you carry the case yourself. The government recovers three times the duties evaded, plus a civil penalty on each false entry — which is why an importer that filed false entries weekly for four years faces hundreds of penalty units, not one.

The case is filed under seal. Your competitor is not served and is not told. That period commonly runs a year or more while the government investigates.

And the Ninth Circuit has now removed two of the obstacles that used to worry counsel in these cases. It held that a relator is not the United States for purposes of the Court of International Trade’s exclusive jurisdiction, so a relator may bring a customs FCA case in federal district court. And, applying the Supreme Court’s decision in United States ex rel. Schutte v. SuperValu, it held that an importer cannot escape liability by arguing that its reading of the rules was objectively reasonable. What matters is what the importer actually believed.

If the competitor is publicly traded, there is more than one door

Customs fraud rarely travels alone, and the False Claims Act is not the only program that pays.

The SEC. A public company whose margins depend on evaded duties has a disclosure problem, a books-and-records problem, and an internal-controls problem. Under Dodd-Frank, awards run 10 to 30 percent of sanctions over $1 million, and submissions can be made anonymously through counsel.

The CFTC. Where the goods are commodities and the conduct touches futures, swaps, or physical markets subject to the Commodity Exchange Act, the CFTC program applies on comparable terms.

The IRS. Duty evasion schemes are frequently built on the same architecture as tax fraud — related-party invoicing, value shifted onto side agreements, income that never appears. Where that is true, the IRS whistleblower program is a separate and independent claim.

The Justice Department also now runs a Corporate Whistleblower Awards Pilot Program that reaches trade and tariff fraud directly.

These are not mutually exclusive. The right combination depends on the facts.

What a real case requires

Be clear-eyed. A hunch about a price is where these cases start; it is not where they get filed.

What makes a case is specificity: identified entries, dates, and shipment records; the tariff line your competitor uses against the one the product actually falls under; the product described one way to customers and another way to CBP; publicly available import data; the actual manufacturer behind the nominal exporter. Island’s sales manager built the foundation of a $26 million judgment from public sources and a phone call.

Two cautions, and they matter. The first to file generally takes the case — while one relator’s action is pending on a set of facts, no one else can bring it, so a competitor who waits a year may find the claim is gone. And how you obtain information matters as much as what it shows. Public data, your own records, and what you learn in the ordinary course of business are the foundation of a strong case. Anything else should not be gathered without talking to counsel first.

Stand up

The customs/tariff laws exist for exactly one reason: to make sure the company that plays straight is not punished for it. When a competitor evades duties and takes your contract, three things happen. The Treasury loses money that other taxpayers make up. Your workers lose the order. And compliance stops being a baseline and becomes a competitive disadvantage — which is how an industry talks itself, one supplier at a time, into practices no one would have defended five years earlier.

You are the person in the best position in the entire country to see it. Not a government analyst reading aggregate trade statistics. You. You know what the product costs to make, what it costs to ship, and what duty it owes. When the number on the other side of the table is impossible, you are the only one who knows it is impossible.

The government wants these cases. It needs these cases! It has said so. But it cannot bring what it does not know about. Stand up now. The fraud must be stopped and you can stop it.

Jeff Newman Law is a national whistleblower law firm that handles SEC whistleblower cases and False Claims Act cases. The firm can be reached at www.JeffNewmanLaw.com or at 617-823-3217