Tariff Enforcement Defense

Experienced Defense Counsel for Tariff Evasion Cases Involving the DOJ and Other Federal Authorities

John W. Sellers — **Attorney John Sellers**
International Trade Tariff Enforcement Team Lead
Former DOJ Trial Attorney

**Glenn Karabeika**
International Trade Tariff Enforcement Team
Former HSI Special Agent

The U.S. Department of Justice (DOJ) and U.S. Customs and Border Protection (CBP), other federal agencies are aggressively targeting importers, customs brokers, and other entities and individuals in tariff evasion cases. The DOJ recently shifted resources to enhance its tariff enforcement capabilities—creating a new Market, Government, and Consumer Fraud Unit (MGCF Unit) that is specifically tasked with pursuing criminal charges for tariff violations under the False Claims Act.

Facing allegations of tariff evasion from the DOJ presents serious risks. While the DOJ has historically pursued civil False Claims Act penalties in tariff enforcement cases, it has made clear that it plans to prioritize criminal enforcement going forward. Along with significant monetary penalties, a finding of criminal liability under the False Claims Act can also lead to federal imprisonment.

Tariff Evasion Presents Substantial Risks During the Second Trump Administration

At Oberheiden P.C., we defend importers, customs brokers, and other entities and individuals that are facing accusations of tariff evasion and other customs violations. While the newly imposed tariffs under the second Trump Administration are leading to increased costs for many companies in the U.S., this is not an excuse for noncompliance. The DOJ has expressly stated that it intends to prioritize enforcing compliance under the current tariff regime—and that it intends to seek to have the courts impose penalties (including criminal penalties) for all forms of unlawful conduct related to tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA).

Whether you have concerns about managing compliance with the duties imposed under the current U.S. trade policy or you need defense counsel for a government investigation targeting alleged customs fraud, we can help. Our attorneys have extensive experience on both sides of cases involving enforcement of U.S. customs laws. We have extensive experience in cases involving criminal charges under the False Claims Act as well—and we can use this experience to defend you (or your company) if the DOJ is pursuing criminal liability for customs fraud in federal court.

Understanding What Constitutes Tariff Evasion

Allegations of tariff evasion can take numerous different forms. The Justice Department and Customs and Border Protection are targeting all types of tax evasion schemes—including not only alleged evasion of reciprocal tariffs, but alleged evasion of other tariffs as well.

Some examples of allegations that have the potential to trigger government investigations and criminal charges include:

Failing to Comply with the Harmonized Tariff Schedule – The Harmonized Tariff Schedule establishes the tariff rates and categories for all goods that are subject to customs duties under U.S. federal law. Failing to comply with the Harmonized Tariff Schedule (i.e., by improperly claiming that goods fall into one category in order to avoid paying tariffs in a higher tariff category) can lead to allegations of tariff evasion under the False Claims Act.
Valuation Schemes – Valuation schemes involve fraudulently misrepresenting the value of imported goods in order to avoid new tariffs imposed under the Administration’s reciprocal tariffs policy. To uncover valuation schemes in cases involving global trade, the DOJ is leveraging the resources of its new MGCF Unit to obtain relevant documents from entities in the supply chain both in the U.S. and abroad.
Double-Invoicing Schemes – Double-invoicing schemes seek to minimize tariff payments by billing for goods at one price and then submitting invoices to CPB that show a lower price in order to avoid tariff liability.Along with unpaid tariffs, underpaid tariffs can also expose companies (and their owners and executives) to civil fines or criminal penalties.
Misrepresenting the Country of Origin – Misrepresenting the country of origin as a lower tariff country rather than a high tariff country is among the main focuses of the DOJ’s ongoing efforts to target tariff evasion and customs fraud. This includes, but is not limited to, diverting shipments through third countries in order to list these as a country of origin. Whether an importer, customs broker, or another company uses a third country or simply misrepresents a lower tariff country as a country of origin, doing so can create substantial criminal liability exposure.
Improperly Claiming that Goods Are Duty Free – Another common focus of DOJ tariff evasion cases is improperly claiming that goods are duty free. Improperly claiming that goods fall into an exempted tariff category is also a clear form of tariff evasion that can lead to criminal prosecution for making false statements to CBP or other federal authorities.
Making Other False Statements to Customs Officers – Along with misrepresenting pricing within the supply chain, misrepresenting the country of origin, and improperly claiming that goods fall into an exempted tariff category in order to avoid customs duties, making other false statements to customs officers can lead to criminal prosecution as well. The DOJ is targeting all forms of tariff evasion, and making any false statements in order to evade tariffs or receive duty free treatment has the potential to result in criminal charges.

Our lawyers are available to represent clients in cases involving allegations of other illegal foreign trade practices as well. This includes violations related to Chinese origin goods and other Chinese imports, as well as imports from all other high tariff countries.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

What We Can Do to Help

The Trump Administration views tariff enforcement as crucial to preserving market integrity and advancing its America-first agenda. As a result, it is imperative that importers, customs brokers, and others not only prioritize compliance, but also ensure that they are prepared to defend against allegations of non-compliance when necessary. With this in mind, here are just some of the ways our attorneys can help:

U.S. Federal Tariff Compliance and Customs Fraud Consulting

We help companies develop and implement comprehensive and custom-tailored tariff compliance programs. In this capacity, we focus on ensuring that our clients have the policies, training materials, and protocols they need to maintain cross-border trade compliance, protect their import privileges, and avoid criminal prosecution.

Representation During CBP and DOJ Investigations

We represent both new and existing clients during CBP and DOJ investigations. If your company is under investigation for alleged tariff violations, time is of the essence. Our attorneys can intervene in the government’s investigation immediately and execute a strategic defense on your company’s behalf.

Defense Against Whistleblower Complaints Alleging Tariff Evasion

The DOJ is encouraging whistleblowers to report tariff fraud, and it is offering a whistleblower incentive award to those who come forward. If your company is facing a whistleblower complaint related to tariff compliance, it is imperative that you engage experienced defense counsel promptly in this scenario as well.

Defense Against Criminal Tariff Enforcement Actions

If the DOJ is pursuing criminal charges for nonpayment or underpayment of import duties, substantial penalties are on the table. Our attorneys can immediately get to work fighting to protect your company (or you personally) by all means available. As discussed above, we have extensive experience on both sides of these cases, as several of our attorneys formerly served as prosecutors with the DOJ.

FAQs: Avoiding Serious Consequences in Criminal Prosecutions Under the False Claims Act

When Can Importers and Others Face Criminal Prosecution for Tariff Evasion?

The DOJ is pursuing criminal enforcement actions in cases involving all types of alleged tariff and customs violations. If your company is facing scrutiny from DOJ officials or agents with Customs and Border Protection or Homeland Security, we strongly recommend that you consult with experienced defense counsel immediately.

Is There a Difference Between Tariff Evasion and Customs Fraud?

Tariff evasion is one form of customs fraud. While DOJ officials are primarily focused on cases involving alleged tariff evasion schemes, they are pursuing cases involving other forms of alleged customs fraud as well.

Is Underpaying a Tariff Considered a “False Claim”?

Yes, underpaying a tariff is considered a “false claim” under the federal False Claims Act. While the DOJ has historically pursued civil penalties in these cases, the Department has recently said that it intends to largely bypass civil penalties and pursue criminal enforcement instead.

What Are the Penalties for Tariff Evasion Under the False Claims Act?

In criminal enforcement cases under the False Claims Act, importers and other businesses can face fines of up to $500,000 per violation. Individuals (including company owners and executives) can face fines of up to $250,000 plus five years of federal prison time per violation.

How Important is Supply Chain Transparency for Tariff and Customs Compliance?

Supply chain transparency is a key aspect of tariff and customs compliance. When facing scrutiny from the DOJ or other federal authorities, being able to clearly demonstrate that pricing and product classifications have remained consistent throughout the supply chain can be a key step toward avoiding serious consequences.

Speak with a Senior Attorney at Oberheiden P.C. Today

When the government intervenes to put a stop to tariff violations, the consequences can be severe. If your company is facing scrutiny related in whole or substantial part to the new tariffs imposed under the Trump Administration’s reciprocal tariff policy—or if you want to take proactive steps to avoid federal scrutiny—we encourage you to contact us promptly for more information. Call 888-680-1745 or contact us online to speak with a senior attorney at Oberheiden P.C. today.

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