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ARTICLE · 22 OCTOBER 2026

How A Customs Error Becomes A Fraud Case

Barnes & Thornburg LLP
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The False Claims Act now applies to customs violations, transforming routine tariff disputes into potential fraud cases with treble damages and criminal exposure. Companies face liability not only for misclassification but also for money laundering, RICO charges, and securities violations when customs duties are underpaid or concealed.

United StatesCriminal Law
Scott Hulsey
Scott Hulsey
Adetayo Osuntogun
Adetayo Osuntogun
Emily Harake
Emily Harake
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Part 2 of 4 in a series drawn from the Barnes & Thornburg white paper "False Claims Act and Criminal Enforcement in the Tariff Context: Practical Guidance for Companies, Corporations, and Executives"

Importers often assume that a customs problem stays a customs problem: the entry was wrong, CBP assesses a penalty under Section 1592 of the Tariff Act, and the exposure is bounded by the merchandise.

The current enforcement environment does not work that way. A single set of facts can support civil fraud liability with treble damages, felony charges, money laundering and RICO exposure, and — for public companies — securities liability.

The False Claims Act and Customs

The False Claims Act (FCA ) is the government's primary civil tool for fraud involving federal funds, and it is usually associated with healthcare and defense procurement. Two theories apply in the tariff context.

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