The federal government is widening its crackdown on tariff evasion and customs fraud, with recent actions targeting auto parts, aluminum, steel and rail components as importers face heightened scrutiny over country-of-origin claims, product classifications and declared customs…
lues. The cases show how tariff enforcement is increasingly moving through multiple channels: False Claims Act lawsuits, whistleblower complaints, bankruptcy claims, settlements and U.S
Customs and Border Protection (CBP) investigations under the Enforce and Protect Act. The largest recent case involves First Brands Group, the bankrupt auto-parts supplier, which is facing a $285.5 million claim from the U.S. government in its Chapter 11 case. The government alleges First Brands undervalued goods imported from China to avoid paying higher duties.
According to a report from The Wall Street Journal, the Justice Department claim stems from a previously sealed whistleblower lawsuit filed in 2022 against First Brands, its brake parts and centric parts divisions, and a Chinese subsidiary, Longkou Haimeng Machinery. The lawsuit alleged that after First Brands acquired the division in 2020, it “systematically slashed” the prices it reported paying to the Chinese division for auto components. The whistleblower complaint alleged First Brands cut transfer prices declared to CBP by roughly 32%, lowering tariff obligations even as manufacturing costs rose globally and the company raised prices to customers.