The Department of Justice (DOJ) recently announced two False Claims Act (FCA) settlements stemming from evasion of customs duties, further indicating an increased focus on customs fraud enforcement. The settlements suggest that – just as in the criminal context – detection, self-disclosure, and remediation will be critical when resolving FCA claims regarding customs fraud. Importers and other at-risk entities should evaluate their compliance programs and conduct regular risk assessments to mitigate potential risks. 

On July 23, 2025, the DOJ announced a $6.8 million settlement with two U.S.-based importers – Global Plastics LLC and Marco Polo International LLC – for failure to pay customs duties on plastic resin products manufactured in China. The DOJ alleged that Global Plastics and Marco Polo, both subsidiaries of MGI International LLC (MGI), knowingly failed to declare the correct country of origin and value of various plastic resin products the companies imported into the U.S. Because a product's origin and value are critical factors for determining appropriate import duties, the companies' failures resulted in the defendants' evasion of the proper duties. 

The FCA settlement with the MGI subsidiaries demonstrates several ways that companies can cooperate with the government to mitigate the consequences of an ongoing FCA investigation or lawsuit. MGI voluntarily disclosed its errors, performed an in-depth internal investigation, preserved and produced relevant facts to the government, conducted and shared with the government an analysis of potential damages, and took remedial actions including disciplining responsible personnel and updating compliance procedures. According to the DOJ, this cooperation resulted in favorable credit when reaching a resolution with MGI. Acting U.S. Attorney for the District of New Hampshire Jay McCormack affirmed, "when companies self-disclose misconduct, cooperate fully with the government's investigation, and take meaningful corrective action, they can receive credit for those admissions." Assistant Attorney General Brett A. Shumate of the DOJ's Civil Division agreed, noting that importers who may have submitted incorrect information and paid improper import duties "can mitigate the consequences by making timely self-disclosures, cooperating with investigations, and taking appropriate remedial measures." 

These comments are consistent with the recently revised Corporate Enforcement Policy (CEP) published by the DOJ Criminal Division. As previously reported, the CEP states that the DOJ will decline to prosecute a company for criminal conduct when it voluntarily self-discloses, fully cooperates, timely and appropriately remediates, and there are no aggravating circumstances. Though the CEP is focused on criminal conduct, the MGI settlement shows that many of the same factors are relevant to resolving FCA issues. 

On July 24, 2025, the day after the MGI settlement, the DOJ announced a $4.9 million FCA settlement with the French furniture manufacturer Grosfillex, Inc., for allegations that the company evaded anti-dumping and countervailing duties (ADD/CVD) on aluminum products from China. The DOJ alleged that Grosfillex knowingly submitted false customs forms to evade ADD/CVD payments, claiming that their imports were not subject to the duties on certain aluminum products from China. For instance, the DOJ alleged that Grosfillex packaged some imports to look like furniture "kits" that buyers may build, which would not be covered by the ADD/CVD orders, rather than furniture parts, which are within the ADD/CVD order scope.

Unlike the MGI matter, Grosfillex did not self-disclose its misconduct. The investigation started in 2020 with a whistleblower lawsuit filed by a former employee. In addition, the DOJ specifically noted that Grosfillex failed to correct previously submitted customs forms even after it learned that those forms falsely stated that the imported products were not subject to the ADD/CVD orders. The DOJ's focus on Grosfillex's failure to self-report and remediate past violations emphasizes that early detection and remediation are critical aspects of these cases. 

Finally, while both investigations began prior to this year, the MGI and Grosfillex settlements are consistent with the focus that the current administration has on combatting customs fraud, including through FCA prosecutions and settlements. The DOJ signaled a shift of resources to address tariff avoidance, and we have reported on the administration's use of the FCA here, here, and here. Companies who operate in this area, particular those who import manufacturing material like the MGI subsidiaries and Grosfillex, must be aware of the administration's attention in this area and remain vigilant in maintaining robust compliance programs to minimize their risk. 

For more information, please contact:

Joshua Drew, jdrew@milchev.com, 202-626-5811

Ian A. Herbert, iherbert@milchev.com, 202-626-1496

Richard A. Mojica, rmojica@milchev.com, 202-626-1571

Bradley E. Markano, bmarkano@milchev.com, 202-626-6061

Peter Kentz, pkentz@milchev.com, 202-626-5891

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