DOJ Criminal and Civil Divisions Announce Major Tariff Evasion Actions

The US Department of Justice (DOJ) on December 18, 2025 announced two significant enforcement actions underscoring tariff evasion as an enforcement priority. The actions highlight the work of DOJ’s Trade Fraud Task Force—stood up in August 2025—and signal continued coordination between DOJ’s Criminal and Civil Divisions and the US Department of Homeland Security. We previewed this development in a prior LawFlash on December 3, 2025.

The December 18 announcements—released concurrently at 7:00 am ET—reflect the range of DOJ’s white-collar enforcement on tariff evasion. In one case, a self-reporting company was given a criminal declination in recognition of a prior civil penalty, its cooperation, and its remediation. In the other, a company paid more than $54 million to resolve potential False Claims Act (FCA) violations, and an individual qui tam relator stood to receive an award of $9.75 million.

CORPORATE CRIMINAL DECLINATION & C-SUITE GUILTY PLEA

As we discussed in our December 18 webinar titled Navigating the False Claims Act: Risks and Enforcement in Tariff Evasion, one example (out of many) of the consequences of incorrect country-of-origin declarations was the settlement announced by DOJ on July 23, 2025 between the DOJ’s Civil Division and MGI International LLC. MGI agreed to pay $6.8 million to resolve potential civil liability under the FCA for two subsidiaries “knowingly failing to pay customs duties.” Specifically, to avoid Section 301 tariffs on imports from China, the subsidiaries indicated origins of Taiwan, Saudi Arabia, or the United States.

In July 2025, DOJ’s Civil Division stated that “MGI cooperated with the United States’ investigation by, among other things: making a timely voluntary self-disclosure of the potential violations; performing a thorough and independent internal investigation; preserving, collecting, and disclosing facts not known to the government but relevant to its investigation; conducting an analysis of potential damages that was shared with the government; and implementing appropriate remedial actions, including disciplining personnel and making improvements to compliance procedures.”

On December 18, DOJ announced a related “resolution of a criminal trade fraud investigation into MGI International, LLC and its subsidiaries . . . pursuant to Part I of the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).” DOJ “declined to prosecute MGI and agreed to credit $6.8 million previously paid” to resolve MGI’s civil liability under the FCA as satisfying any amounts due under the CEP. DOJ’s press release noted that the actions involving MGI “were coordinated through” the Task Force, and according to US Deputy Attorney General Todd Blanche, “As this announcement demonstrates, the department will hold to account individuals and corporations who lie to evade tariffs and duties.”

The matter was not, however, resolved without any criminal consequences. MGI’s former chief operating officer was charged on December 17, 2025, “by criminal information and has agreed to plead guilty to conspiracy to smuggle goods into the United States.”

$54 MILLION CORPORATE CIVIL RESOLUTION, WITH $9.75 MILLION WHISTLEBLOWER AWARD

The same day it announced the MGI declination, DOJ also announced that North Carolina-based Ceratizit USA LLC (Ceratizit), a distributor of tungsten carbide products, “has agreed to pay $54.4 million to resolve allegations that it violated the False Claims Act by knowingly and improperly failing to pay duties owed on tungsten carbide products imported from the People’s Republic of China (China).”

Like the resolution with MGI, the Ceratizit resolution involved the nonpayment of Section 301 tariffs. According to DOJ, “the United States alleged that Ceratizit knew these products had been manufactured in China and transshipped to Taiwan before being shipped to the United States. Ceratizit allegedly misrepresented to US Customs and Border Protection that the products originated in Taiwan rather than China to avoid paying applicable Section 301 tariffs.” The settlement also resolved allegations that Ceratizit “knowingly misclassified” products by using the incorrect US Harmonized Tariff Schedule code and that certain items were not marked with the country of origin.

These allegations were first publicly made by a qui tam relator in a complaint filed in the Eastern District of Michigan on September 28, 2022, which the US government ultimately joined (the United States filed its Notice of Election to Intervene on December 9, 2025, after the settlement was signed; it is unknown when the US government’s decision to join the complaint was taken).

In the relator’s complaint, the allegations of which Ceratizit denies, the relator described himself as “a long-time participant in the metalworking products industry who is intimately familiar with Chinese production and sale of sintered tungsten carbide products, including the rods at issue in this case.” Among the allegations the relator made related to his false-country-of-origin claim were the following circumstantial allegations contrasting available import data against the underlying economic realities of the raw material sourcing and manufacturing capacity involved in producing the rods at issue:

• The rods were originally manufactured in Taiwan, but between 1999 and 2003 the US entity’s parent entity offshored “the vast majority” of its manufacturing to China.
• “According to the import documents submitted by Ceratizit USA, from 2007 through October 5, 2018, every time it imported tungsten carbide rods manufactured by CB-Ceratizit into the United States by boat, the shipment originated in Xiamen, China.”
• “But starting with a sea shipment that arrived in the United States on October 24, 2018—only one month after the Section 301 tariffs were imposed—and continuing to the present, almost all such shipments have originated in Taiwan instead of China.”
• There were not “sufficient manufacturing capabilities in Taiwan to make the volume of rods that have been imported into the United States.”
• “Taiwan does not possess sufficient raw materials to produce that volume of rods, nor have the necessary raw materials been imported into Taiwan.”

Ceratizit’s settlement with DOJ’s Civil Division does not release Ceratizit from any potential criminal liability. DOJ’s press release included reference to the August 29, 2025, creation of the Task Force without reference to whether a related criminal resolution would be forthcoming.

KEY TAKEAWAYS

These parallel announcements drive home the key takeaways from our December 3, 2025 LawFlash, specifically that companies should ensure that trade compliance programs and other relevant corporate functions and stakeholders factor in the risk of criminal enforcement. As we wrote previously, now is the time for companies to treat tariff compliance not just as a civil or administrative risk but also as an area of potential criminal liability.

The December 18 announcements provide additional lessons for corporate officers and compliance teams, including the following:

• Tariff evasion has the attention of, and is a priority for, the highest levels of DOJ
• The task force appears to be looking for existing investigations and litigation to leverage, including, at least here, a years-old case filed by a qui tam relators
• Both relators and DOJ will be mining available import data
• DOJ was willing to join a qui tam complaint based on, among other things, alleged circumstantial, holistic evidence regarding the underlying economic realities—specifically the source of raw material inputs and the location of manufacturing capacity—in contrast to the reported import data

This last point in particular can be leveraged by companies and their compliance teams in proactive, internal reassessments of their own tariff evasion compliance and enforcement risks.

HOW WE CAN HELP

Our white collar and international trade and national security teams stand ready to assist companies in

• assessing or reassessing customs duties and tariffs compliance and enforcement risks in light of DOJ’s public statements;
• evaluating, adopting, and defending legitimate ways to reduce tariff exposure consistent with applicable law while avoiding common pitfalls or misperceptions; and
• responding to investigations by any US agencies challenging importers’ positions on customs duties and tariffs.

Our white collar and international trade and national security practices are at the forefront of practical, risk-based responses to investigations and compliance regarding US customs duties and tariffs, as well as investigations and compliance related to US criminal and national security laws more generally.

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