On May 12, 2026, the DOJ announced that Perfectus Aluminum Inc. and affiliated companies agreed to pay $549.5 million to resolve False Claims Act (FCA) allegations arising from a scheme to evade customs duties on aluminum imports from China. This settlement (more than ten times larger than the previous customs-related FCA record) signals that DOJ is now deploying the FCA’s treble-damages framework as a primary weapon against tariff evasion. For companies that import goods subject to anti-dumping and countervailing duties (AD/CVD), Section 301 tariffs, or other special tariffs, the Perfectus resolution is a clear call to action.
The Perfectus Aluminum Scheme
The Perfectus case arose from a scheme to evade antidumping and countervailing duties owed on aluminum extrusions imported from China. From July 2011 through June 2014, the Perfectus entities imported more than 2.2 million aluminum extrusions disguised as “pallets” by spot-welding them together to appear as finished merchandise not subject to the AD/CVD order. No pallets were ever sold.
The scheme’s first legal consequence came in August 2021, when a federal jury in the Central District of California convicted six corporate defendants of conspiracy to defraud the United States — a criminal case that set the stage for the record-breaking civil settlement that followed.
That civil settlement, $549.5 million, is all the more striking given the timing of the scheme. The conduct occurred from 2011 to 2014, when importers’ primary recourse for self-reporting was U.S. Customs and Border Protection’s longstanding voluntary prior disclosure program, which can reduce or eliminate civil penalties. But DOJ’s 120-day safe harbor for voluntary reporting matters raised by internal whistleblowers had not yet been established.
The contrast with recent cases is stark: MGI International, which self-disclosed unpaid customs duties on Chinese imports in 2024, paid only $6.8 million and received a criminal declination. Companies that identify potential customs violations today benefit from both CBP’s voluntary prior disclosure program and DOJ’s expanded self-disclosure framework, options that, taken together, offer stronger protections than were available when Perfectus’s scheme was ongoing.
The FCA’s “Reverse False Claims” Theory
The $549.5 million settlement resolves civil allegations that Perfectus knowingly submitted false customs declarations, evading AD/CVD owed on aluminum imports. The case relies on the FCA’s “reverse false claims” provision, 31 U.S.C. § 3729(a)(1)(G), which imposes liability on anyone who “knowingly conceals or decreases an obligation to pay or transmit money or property to the Government.” This means any company that knowingly underreports value, misclassifies goods, or misrepresents country of origin to reduce customs obligations may face FCA liability, including treble damages and civil penalties that can exceed $27,000 per violation.
The settlement’s magnitude is without precedent. The $549.5 million figure is substantially higher than 2025 customs-related FCA settlements, which ranged from $4.9 million to $54.4 million. The settlement had the potential to be even higher, considering the $1.8 billion in evaded duties and the FCA’s treble damages multiplier.
Perfectus appears to represent a qualitative shift in DOJ’s willingness to pursue customs fraud on a scale previously reserved for healthcare and defense procurement fraud.
The New Enforcement Architecture
The Perfectus settlement reflects a sustained institutional buildup. In August 2025, DOJ and DHS launched the Trade Fraud Task Force, combining prosecutors and investigators from multiple agencies. DOJ’s May 2025 memorandum listed trade fraud among ten “high-impact areas” of enforcement. In fiscal year 2025, DOJ recovered a record $6.8 billion in FCA settlements, with 78% derived from whistleblower-initiated cases.
The tariff landscape continues to expand. Existing tariff regimes under Section 232 and Section 301 remain fully in effect, the de minimis exemption is suspended, and new bilateral trade agreements incorporate enforcement provisions.
What This Means for Your Business
- Self-Disclosure Is Critical. CBP’s voluntary prior disclosure program has long allowed importers to self-report potential violations and reduce or eliminate civil penalties. More recently, DOJ’s Criminal Division introduced “guaranteed” declinations for qualifying self-disclosures in May 2025, and the March 2026 department-wide Corporate Enforcement Policy extended that framework across all DOJ components. Companies that voluntarily self-disclose, fully cooperate, and timely remediate now potentially have more certainty about receiving a declination of criminal prosecution absent aggravating circumstances. As the MGI resolution demonstrates, early disclosure can dramatically reduce both civil liability and criminal exposure.
- Whistleblower Risk Is Elevated. The FCA’s qui tam provisions entitle whistleblowers to 15–30% of recoveries, and DOJ’s expanded Whistleblower Awards Pilot Program now covers customs fraud. DOJ’s Corporate Enforcement Policy includes a 120-day safe harbor: companies can still qualify for a declination if they self-report within 120 days of an internal whistleblower report. Publicly available customs data is increasingly being used to identify duty-evasion schemes.
- Expect Parallel Enforcement. A single course of customs fraud can trigger criminal fraud charges, civil FCA liability, civil penalties under the Tariff Act of 1930, and CBP administrative enforcement. Perfectus illustrates this: the company paid $1.83 billion in criminal restitution in addition to the $549.5 million civil FCA settlement.
- Audit Your Supply Chain. FCA liability can extend to importers, intermediaries, and customs brokers who participate in or ignore duty-evasion schemes. Red flags include unexplained changes in country-of-origin declarations, routing through third countries, suspiciously low declared values, and related-party transactions with entities in AD/CVD countries.
- Test Your Compliance Program. DOJ evaluates compliance program effectiveness as part of any resolution. Trade compliance programs should include periodic internal audits, regular training on duty obligations, clear escalation protocols (accounting for the 120-day safe-harbor window), supplier due diligence, and document retention policies.
The Time to Act Is Now
The Perfectus settlement marks a new era in FCA-based trade enforcement. The institutional infrastructure is in place, the legal theory is established, whistleblower incentives are growing, and the tariff landscape continues to expand. Companies that import goods into the United States, particularly from countries subject to AD/CVD or Section 301 tariffs, should treat customs compliance with the same rigor they apply to anti-corruption, sanctions, and export controls. The cost of inaction, as Perfectus demonstrates, can be measured in hundreds of millions of dollars.
