By Jeffrey A. Newman, Esq., MBA (withj ai help)

Tariffs only work if importers actually pay them. That sounds obvious. But as U.S. duty rates have climbed, the incentive to evade them has climbed along with them. Every percentage point added to a tariff schedule is another percentage point an importer can pocket by lying on a customs form.

Whistleblowers are interdicting many of the major fraudsters and 2026 is shaping up to be the year customs fraud became the most lucrative lane in the entire whistleblower system. Customs fraud recoveries under the False Claims Act topped $570 million in just the first five months of 2026, surpassing every prior annual total on record. Two settlements in particular — Ceratizit USA and Perfectus Aluminum — show exactly what these cases look like, how insiders spot them, and what the people who came forward were paid.

Scale of the evasion

In fiscal year 2025, U.S. Customs and Border Protection collected more than $200 billion in duties, taxes, and fees — a record, and a massive increase over the roughly $88 billion collected the prior year. When that much money is on the table, the efforts to route around it become substantial.

And substantial they are. Consider this;

• CBP uncovered more than $400 million in unpaid duties through its Enforce and Protect Act (EAPA) investigations in a roughly seven-month stretch of 2025 alone, identifying 89 cases with reasonable suspicion of duty evasion.
• The largest EAPA investigation in CBP’s history targeted 23 U.S. importers and a network of Chinese shell companies moving goods through Indonesia, South Korea, and Vietnam. Revenue identified for collection exceeded $250 million — and CBP said that number was expected to rise.
• CBP has assessed roughly $2.6 billion in antidumping and countervailing duties owed to the government, and has flagged schemes including one importer who claimed overlapping tariff exemptions to deprive the Treasury of $100 million.
• CBP has also issued 63 debarment actions against parties who failed to pay tariffs, taxes, and fees owed, and has investigated nearly 1,200 revenue-focused allegations submitted by the trade community itself.

The picture these numbers paint is consistent: the volume of duty evasion being attempted far exceeds what enforcement is currently catching. The system is not short of fraud. It is short of information. The False Claims Act — a Civil War-era statute — has become the sharpest tool available.

Case study 1: Ceratizit USA — $54.4 million, and $9.75 million to the whistleblower

In December 2025, Ceratizit USA LLC, a Charlotte, North Carolina distributor of tungsten carbide products, agreed to pay $54.4 million to resolve False Claims Act allegations that it evaded duties on products imported from China. At the time, DOJ described it as the largest customs-fraud resolution ever obtained under the statute.

What makes Ceratizit instructive is that the alleged scheme was not one trick. It was three, stacked:

1. Country-of-origin fraud. From August 2020 through March 2024, the government alleged, Ceratizit knew its tungsten carbide products were manufactured in China, then transshipped to Taiwan before shipping to the U.S. — and told CBP the goods originated in Taiwan. Doing so allegedly let the company sidestep Section 301 tariffs on Chinese goods entirely.
2. Tariff misclassification. Going back further — from June 2015 through March 2024 — the company allegedly used incorrect Harmonized Tariff Schedule codes to further reduce the duties owed. (The HTS is the classification system that determines what rate applies to a given product. Pick a different code, pay a different rate.)
3. Marking duty evasion. Some of the imported merchandise was not marked with its country of origin, and the company allegedly failed to pay the marking duties owed before distributing the unmarked goods to U.S. consumers.

The case began as a qui tam lawsuit — a whistleblower suit filed on the government’s behalf — brought by Mark Stover in 2022 in the Eastern District of Michigan. It took roughly three years to resolve. Stover received approximately $9,750,000 of the settlement proceeds.

Note the timeline: conduct reaching back to 2015, resolved in 2025. Companies that assume old import practices have aged out of enforcement risk are mistaken.

Case study 2: Perfectus Aluminum — $549.5 million, and one of the largest relator shares ever

Then, in May 2026, came the case that reset the ceiling.

Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC, and four affiliated warehousing companies agreed to pay $549.5 million to resolve allegations that they evaded, or conspired to evade, antidumping and countervailing duties on aluminum extrusions imported from China.

The alleged scheme is almost absurd in its simplicity, and it is the kind of thing an insider notices immediately.

Aluminum extrusions from China were subject to both antidumping duties (which counter foreign producers selling below cost) and countervailing duties (which offset foreign government subsidies). Finished aluminum products, however, were not. So — according to the government — the defendants took raw aluminum extrusions, spot-welded them together so they looked like pallets, and declared them to CBP as finished merchandise not subject to the duties.

More than 2.2 million of these “pallets” came in between July 2011 and June 2014. There were no customers for them. Not a single one was ever sold. The false statements appeared on CBP Form 7501 Entry Summaries — the core customs declaration document.

A jury in the Central District of California criminally convicted the Perfectus defendants in 2021 of conspiracy to defraud the United States. The civil False Claims Act cases — filed by relators Mike Rapport, Eric Shen, and the Aluminum Extruders Council — settled in 2026.

The relator share: 17.5 percent of the settlement proceeds returned to CBP. On a $549.5 million settlement, analysts have estimated that at roughly $96 million.

Two lessons here. First, the original whistleblower complaint was filed in 2015 — these cases are marathons, not sprints. Second, note who the relators were: not only individuals, but an industry trade association. You do not have to be an employee of the offending company to bring a customs fraud case. Competitors, suppliers, freight forwarders, customs brokers, and trade groups have all served as relators.

The rest of the pipeline

Ceratizit and Perfectus are the headliners, but the pattern runs deeper:

• Harman International paid roughly $11.8 million to resolve qui tam allegations involving unpaid antidumping and countervailing duties. The whistleblower received about $2.3 million.
• Grosfillex Inc. paid $4.9 million over evaded AD/CVD duties on Chinese aluminum products, in a case brought by a former employee in 2020. That whistleblower received close to $1 million.
• Global Plastics and Marco Polo International (subsidiaries of MGI International) paid $6.8 million for failing to pay duties on Chinese plastic resin — a case that arrived via voluntary self-disclosure, which earned the company cooperation credit.
• A qui tam complaint against Global Office Furniture alleges a double-invoicing scheme in which bills of lading presented to CBP reflected roughly half the true value of Chinese-made office chairs.

Together, customs fraud cases under the False Claims Act have now recovered more than $918 million — and, again, more than half of that came in the first five months of 2026 alone.

The institutional signal is just as loud. DOJ and the Department of Homeland Security launched a cross-agency Trade Fraud Task Force in August 2025. DOJ added trade, tariff, and customs fraud as a priority area in its Corporate Whistleblower Awards Pilot Program. And DOJ’s press releases now routinely close by explicitly encouraging whistleblowers to use the qui tam provisions. That is not boilerplate. That is a recruitment pitch.

You do not have to be a U.S. citizen to be a whistleblower

This is the part most people get wrong, and it matters enormously in customs cases.

The False Claims Act has no citizenship requirement and no residency requirement. Any person or entity anywhere in the world with non-public evidence of fraud against the U.S. government can file a qui tam suit and collect a relator’s share. Nationality is irrelevant. Location is irrelevant. What matters is the quality of the information.

Think about where customs fraud actually happens. The country-of-origin lie is manufactured abroad. The transshipment happens at a foreign port. The double invoice is generated in a foreign supplier’s back office. Very often the only people who can see the fraud clearly are not in the United States at all — they work for the Chinese manufacturer, the Taiwanese re-exporter, the Vietnamese assembly plant, the freight forwarder in Malaysia.

The law was built to reach exactly those people. In one instructive case, a whistleblower living in Turkey, employed by the Turkish supplier whose goods were being undervalued on entry into the U.S., filed a qui tam complaint. DOJ intervened. The case settled for $3.64 million, and the whistleblower — a foreign national who never worked for the American importer — received $728,000.

The practical requirement is that a non-U.S. whistleblower must retain U.S. counsel to file, since the complaint is a federal lawsuit. That is a logistical step, not a barrier.

How the reward actually works

The mechanics are worth stating plainly:

• You file under seal in federal district court. The complaint is secret; the defendant is not served and does not learn of it. Seals routinely last years while DOJ investigates.
• Customs cases proceed under the FCA’s “reverse false claim” provision: it is illegal to knowingly avoid or decrease an obligation to pay the government, not just to fraudulently take money from it. Unpaid duties are exactly that kind of obligation.
• Damages can be doubled or trbled — the government recovers three times the duty loss — plus per-entry statutory penalties. Because importers file thousands of entry lines, penalties alone can exceed the underlying duty loss. That is how a duty gap of a few million becomes a $54 million settlement.
• If the government intervenes, and the case settles, the relator receives 15–25% of the recovery. If it declines and the relator litigates independently, the share rises to 25–30%.
• The FCA prohibits retaliation, with remedies including reinstatement, double back pay, and attorneys’ fees.

And here is the part that makes customs fraud unusually accessible to insiders: it leaves a paper trail. Entry summaries. Commercial invoices. Certificates of origin. HTS classification worksheets. Bills of lading. Emails about “duty exposure.” You do not have to prove the entire conspiracy. You have to show that the documents filed with CBP said something the company knew was false.

Our work in this area

We have been bringing customs fraud cases since long before tariffs were front-page news.

In United States ex rel. Robins v. Roman & Sunstone LLC, we represented Alan Robins, the former controller of a jewelry importer that was underpaying customs duties on sterling silver earrings imported from China. The mechanism was quiet and entirely paper-based — exactly the kind of thing only an insider sees. The company imported the earrings on display cards, and each card held multiple pairs. On its import records, it described the number of display cards rather than the number of individual earrings, concealing both the quantity and the value of what was actually coming in.

The case produced settlements totaling more than $1.26 million with the importer, its affiliates, and its prior owner. Mr. Robins received a relator’s share of more than $220,000.

That case is a useful counterweight to the Perfectus headline. Not every customs case is a nine-figure recovery. A controller with a clear head and a stack of import records built a successful federal fraud case out of a discrepancy that nobody else in the company was looking at.

More broadly, Jeff Newman Law has recovered over $284.4 million for the United States government across our whistleblower practice, including a $125 million settlement with RehabCare Group — in which our clients received a relator’s share of over $23 million — and, more recently, a $28 million resolution against Grand Canyon University and Grand Canyon Education in a case the government declined, which we litigated to settlement on the eve of trial and in which the relator was awarded a 29% share.

We work on a contingency basis. If there is no recovery, there is no fee. And we represent whistleblowers around the world.

If you have seen it

If you work in trade compliance, logistics, procurement, finance, or on a factory floor anywhere in the supply chain, and you have watched a country-of-origin declaration get papered over, an HTS code get shopped, or an invoice get cut in half — you are looking at the most active whistleblower lane in the federal system right now.

The government is paying. It is paying quickly, it is paying large, and it is explicitly asking for help. The one thing it cannot do without is someone on the inside willing to say what actually happened.

Contact us for a confidential consultation. There is no cost to talk, and there is no obligation.

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This article is for general information only and is not legal advice. Every whistleblower case turns on its own facts, and timing rules — including the first-to-file bar — can foreclose claims that are brought too late. If you believe you have information about customs or tariff fraud, speak with qualified counsel before taking any action.

Jeffrey Newman, JD, MBA, a former prosecutor, is a whistleblower lawyer whose firm represents physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. The firm also takes cases involving tariff fraud and export control fraud. Whistleblower laws in the U.S. allow individuals with information about export control violations or tariff fraud to report it under the False Claims Act, which, if successful, awards the whistleblower a percentage of the amount collected. The Firm’s website is www.JeffNewmanLaw.com. Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 617-823-3217. For other blogs, see: http://JeffNewmanLaw.com