The Department of Justice reports that a Taiwanese company and its U.S.-based subsidiary have agreed to pay $5.15 million to resolve allegations that they violated the False Claims Act, common law, and the Tariff Act of 1930 by knowingly failing to pay duties owed on imports from China.
According to an agency press release, the DOJ alleged that for more than three years the companies knowingly misrepresented that products originated in Taiwan, when in fact they were manufactured in China, to avoid paying applicable Section 301 tariffs. The DOJ also alleged that for nearly four years the companies continued to import goods from Taiwan, some of which were manufactured in China based on the country of origin of one component, without segregating the Chinese-made components from the Taiwanese-made components during manufacturing of the final product.
The DOJ notes that this settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the FCA by a former company employee.
In early 2025 the DOJ announced that its Criminal Division’s enforcement priorities for prosecuting corporate and white-collar crimes would include “trade and customs fraudsters, including those who commit tariff evasion.” The DOJ subsequently put teeth into that effort by launching a “revitalized” Trade Fraud Task Force, which has been taking an aggressive and comprehensive approach to its work and has surpassed $1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses in less than a year. Most recently the DOJ established a new Global Trade and Commerce Enforcement Section within its National Fraud Enforcement Division, which will investigate and prosecute criminal import, trade, and other fraud offenses that undermine U.S. industries, evade external revenue collection, threaten consumers’ health and safety, finance foreign adversaries, promote forced labor through illegal trade practices, and violate U.S. laws and regulations governing domestic and foreign commerce.
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