Takeaway: The Department of Justice (“DOJ”) continues to take customs fraud seriously. With the Department of Justice’s newly launched Trade Fraud Task Force, the government has signaled a zero-tolerance policy for customs evasion—particularly regarding Chinese goods. DOJ’s recent $54.4 million settlement with Ceratizit, the largest customs fraud settlement in False Claims Act history, underscores these priorities. And the substantial $9.75 million whistleblower award issued in the case confirms that whistleblowers remain key weapons in detecting complex transshipment and misclassification schemes.
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On December 18, 2025, the U.S. Department of Justice announced a $54.4 million settlement with Ceratizit USA LLC (“Ceratizit”), a distributor of tungsten carbide products, to resolve customs fraud allegations. The case revolved around claims that Ceratizit knowingly evaded customs duties on goods imported from the People’s Republic of China. The whistleblower is expected to receive approximately $9.75 million of the settlement proceeds.
The lawsuit, United States ex rel. Stover v. Ceratizit USA, et al. (E.D. Mich.), alleged that Ceratizit engaged in a multi-faceted scheme to avoid paying duties on tungsten carbide, a material used for manufacturing cutting tools. The allegations center on the claim that Ceratizit was importing Chinse tungsten but made it appear that the product was being imported from Taiwan.
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