Could Customs Fraud Lawsuits Rise in Response to Trump’s 2025 Tariff Plan?

As U.S. trade policies tighten under the 2025 administration, customs fraud has taken center stage in the enforcement spotlight. With renewed efforts to enforce tariffs and protect American industries, businesses engaged in cross border trade face growing investigation. 

Higher customer taxes, new customs taxes schedules, and stricter United States customs charges are making it riskier than ever to cut corners. But could these crackdowns also lead to a wave of whistleblower lawsuits under the False Claim Act?

Understanding this intersection between tariffs and compliance is crucial for importers, exporters, and government contractors alike. 

What is Customs Fraud?

Customs fraud refers to deceptive practices intended to reduce, avoid, or eliminate the payment of duties, tariffs, or taxes on goods entering the U.S. economy. It can involve misrepresenting the nature, value, or origin of imported products in ways that allow businesses to underpay the government. 

As tariff enforcement expands, particularly in light of why Trump is enforcing tariffs initiatives, customs fraud investigations are expected to grow both in number and intensity. 

What Are the Common Types of Customs Fraud?

Fraud against customs authorities takes many forms, each designed to circumvent duty obligations. 

Transshipment 

Transshipment occurs when goods are routed through a third country to hide their true origin. Companies may attempt this to bypass tariffs on restricted countries. As tariffs rise, the incentive for import duty origin fraud becomes stronger. 

Undervaluation 

Undervaluation schemes involve falsely declaring a lower value for imported goods to reduce applicable US customs and duty fees. This tactic can lead to significant revenue loss for the U.S. government and, increasingly, accusations under the False Claims Act. 

Misclassification 

Misclassification involves labeling goods under an incorrect tariff category to take advantage of lower rates. With customs tariff codes becoming even more complex under recent policy changes, opportunities and risks for this type of fraud have multiplied. 

Structuring 

Structuring is the practice of splitting shipments into smaller packages to stay under regulatory thresholds. It can be used to avoid triggering stricter customs inspection or tariff obligations and may be cited in future customs scams investigations. 

The Trump Administration’s Tariffs and Customs Enforcement

The Trump administration’s 2025 stance on tariffs represents a major escalation in U.S. trade protectionism. New tariffs cover a wider range of imports, particularly from strategic competitors. 

As why is Trump enforcing tariffs, discussions dominate the trade sector, increased border inspections and stricter compliance audits are inevitable outcomes. Enforcement agencies have made it clear that they will pursue customs violations aggressively, opening a door for whistleblower complaints under federal fraud statutes. 

Does Customs Fraud Violate the False Claims Act?

Yes. Costume fraud often falls squarely under the False Claims Act, a law that imposes liability on individuals and companies that defraud governmental programs. In fact, states like California have enhanced local regulations, making false claims act California suits an important avenue for reporting customs violations.  

Importers submitting false invoices, misrepresenting goods’ value, or manipulating declaration of fraud documents can face treble damages and hefty civil penalties.

This growing legal threat of fraud documents can face treble damages and hefty civil penalties. This growing legal threat gives whistleblowers strong incentives to come forward. 

Do Whistleblowers Have a Vital Role to Play in Customs Fraud?

Whistleblowers are vital to uncovering fraud schemes that government agencies would struggle to detect on their own.

By providing insider knowledge of pricing strategies, shipping documents, or false declaration of fraud fillings, customs fraud whistleblower claims have led to major recoveries for taxpayers. 

In addition, whistleblowers are protected by law and can receive a portion of any monetary recoveries the government obtains lawsuits. 

Successful False Claims Act Customs Fraud Cases

Recent years have shown several high profile customs fraud cases successfully prosecuted under the False Claims Act. 

Submitting False Invoices 

Companies that alter invoice values to reduce United States customs charges have been penalized heavily, especially when whistleblowers resent documentation proving intent. 

Falsifying the Country of Origin 

False labeling of import  duty origin to disguise the actual country of manufacture has resulted in multimillion dollars settlements. 

Misclassifying Goods 

Misclassification cases, where goods were deliberately filed under the wrong customs tariff codes, have triggered substantial damages awards for the government and whistleblowers alike. 

Undervaluing Imports 

Schemes that intentionally undervalue imports to cheat US customs and duty fees obligations continue to be a prime target for enforcement. 

Structuring and Splitting Imports Into Multiple Packages 

Efforts to split high value shipments into several small ones to avoid explorations have been cited as custom scams in court filings, emphasizing the government’s aggressive stance against fraud.

How to Report Customs Fraud

Concerned individuals who are aware of customs fraud schemes have the legal right to report misconduct. Learning how do i report counterfeit goods or report counterfeit merchandise correctly can be key for those willing to act.

The process typically involves confidentially working with attorneys experienced in whistleblower law. Whether you’re concerned about how to, how to report fake merchandise to authorities or expose undervaluation scams, following formal whistleblower procedures ensures protection and eligibility for reward incentives. 

Key Takeaways

The aggressive tariff environment created by the Trump administration will likely lead to an uptick in customs fraud cases. Whistleblowers have a powerful role to play in safeguarding government revenues and can benefit financially by coming forward with credible information. 

Companies involved in cross border trade must review their compliance programs carefully and align with stricter customs practices to avoid massive liability exposure. 

With the stakes higher than ever, maintaining transparency in trade declarations, invoices, and country of origin certifications isn’t just good business practice, it’s a legal necessity in 2025 and beyond.