Customs, Trade, and Tariff Whistleblower Awards

Monetary Awards Are Available to Tariff Whistleblowers Under the False Claims Act and DOJ Whistleblower Program

Employees and other individuals who report customs, trade, and tariff fraud to the federal government may be eligible to receive substantial monetary rewards. The US Department of Justice (DOJ) and US Department of Homeland Security (DHS) are prioritizing customs fraud cases, and they are encouraging whistleblowers to report tariff evasion and other violations of federal import and customs laws through the appropriate channels.

When eligible whistleblowers help the federal government pursue successful enforcement actions, they are entitled to a financial reward calculated as a percentage of the monetary sanctions collected. As efforts to evade tariffs and customs duties can involve substantial government losses—potentially in the tens or hundreds of millions of dollars—whistleblower rewards can be substantial as well.  

If you think you may be eligible to serve as a tariff and customs fraud whistleblower, keep reading to learn more about the whistleblower reward laws that apply in these cases:

Tariff Whistleblower Complaints and Awards Under the False Claims Act

In many cases, whistleblowers who are prepared to report violations of federal customs, trade, and tariff requirements will be able to come forward under the False Claims Act. Along with providing strong whistleblower protections, the False Claims Act also provides for whistleblower awards when individuals’ complaints lead to successful enforcement actions.

Typically, these cases involve so-called “reverse false claims.” In a typical scenario, a False Claims Act whistleblower will allege that a company has improperly obtained taxpayer funds. In customs duty and tariff evasion cases, however, whistleblowers allege that companies have failed to pay amounts due to the federal government.

Under the False Claims Act’s whistleblower reward provisions, individuals who help the government recover unpaid duties and tariffs are generally entitled to between 15% and 30% of the amount the government recovers. Awards for successful whistleblowers are broken down into two categories:

• 15% to 25%: If the government intervenes and pursues the case directly, the whistleblower is entitled to between 15% and 25% of the amount the government recovers.
• 25% to 30%: If the government declines to intervene and the whistleblower pursues the case directly, the whistleblower is entitled to between 25% and 30% of the amount recovered on the government’s behalf.

In False Claims Act cases, the amount of material support a whistleblower provides is a key factor in determining the specific percentage of the whistleblower’s reward (if the case is successful). When we represent whistleblowers in these customs, trade, and tariff cases, we work with the DOJ, US Customs and Border Protection (CBP), and other appropriate authorities on behalf of our clients to help maximize their award eligibility.

Tariff Whistleblower Complaints and Awards Under the US Department of Justice (DOJ) Whistleblower Program

The DOJ’s Criminal Division also accepts customs, trade, and tariff whistleblower complaints directly under its Corporate Whistleblower Awards Program. Under this program, whistleblowers can report violations by companies operating in domestic industries and abroad, and they can report violations under a wide range of federal criminal statutes.

For example, in addition to customs duty and tariff evasion, these cases will frequently involve sanctions violations, tax evasion and tax fraud, and other fraud schemes as well. Our federal whistleblower attorneys (many of whom are former DOJ prosecutors) have experience in all of these types of cases, and we can help you report all pertinent forms of fraud to the DOJ.

Under the DOJ’s Corporate Whistleblower Awards Program, if a whistleblower’s information leads to a successful enforcement action, the whistleblower is entitled to an award determined based on the amount recovered. As the DOJ explains:

• “Whistleblowers may receive up to 30 percent of the first $100 million in net proceeds forfeited.”
• Whistleblowers may receive “up to 5 percent of any net proceeds forfeited between $100 million and $500 million.”
• “For the first $10 million in net proceeds forfeited, the Department will apply a presumption in favor of awarding a whistleblower the maximum 30 percent of such proceeds.”

As the DOJ also explains, specific award amounts are determined based on various factors. These include “the usefulness of the whistleblower’s information and the level of assistance provided,” among others. If you have (or believe you may have) information about possible violations of federal customs, import, or tariff laws involving goods imported from abroad, our attorneys can determine if you are eligible to file a whistleblower complaint with the DOJ; and, if you are, we can work directly with the DOJ on your behalf.

Common Examples of Customs, Trade, and Tariff Fraud

Under both the False Claims Act and the DOJ’s Corporate Whistleblower Awards Program, whistleblowers can report all types of customs, trade, and tariff fraud. This includes—but is not limited to—common forms of fraud such as:

Country of Origin Fraud

Reporting the wrong country of origin in order to avoid paying customs duties or tariffs (or to pay a reduced customs duty or tariff) is a clear violation of federal law. This includes efforts to evade countervailing duties, tariffs imposed during the Trump administration, and other tariffs and duties imposed as foreign policy tools.

Misclassifying Imported Goods

Misclassifying imported goods under the Harmonized Tariff Schedule is a clear form of fraud as well. Using forged or altered invoices, making false statements in official forms, and other efforts to deceive domestic public officials can all warrant civil or criminal prosecution.

Rerouting Through Third Countries

Violations related to rerouting goods through third countries are also common. In these cases, a company’s knowing failure to accurately report the true country of origin in a supply chain can trigger substantial penalties, including treble damages in some cases.

Other Common Violations in Customs, Trade, and Tariff Fraud Cases

As noted above, in many cases, whistleblowers who have information about customs, trade, and tariff fraud will be able to assist the DOJ with pursuing charges for other compliance failures and criminal violations as well. These are just a few of numerous examples:

Dodd-Frank Act Violations

The Dodd-Frank Act allows whistleblowers to report violations that impact the U.S. commodities markets, including violations of the Commodity Exchange Act.

Money Laundering

In many cases, companies that evade federal customs duties and tariffs can also face charges for money laundering, tax evasion, and other similar types of financial crimes.

Procurement Fraud

When government contractors (including defense contractors) evade customs duties and tariffs, this can give rise to procurement fraud charges as well.

FAQs: Awards for Reporting Tariff or Customs Fraud to the Federal Government

Speak with a Federal Whistleblower Lawyer at Oberheiden P.C. in Strict Confidence

Our lawyers have extensive experience representing whistleblowers in cases under the False Claims Act as well as cases involving complaints filed directly with the DOJ and other federal authorities. If you would like more information about the monetary awards that are available in customs, trade, and tariff whistleblower cases, we invite you to call 888-680-1745 or contact us online for a free and confidential consultation.

Further Information About Our Customs, Trade & Tariff Whistleblower Lawyer Services

• Customs, Trade & Tariff Whistleblowers
• Do I Need to Hire a Tariff Whistleblower Attorney?
• Who Can Serve as a Customs Whistleblower?