Two Settlements, One Message: DOJ Keeps Up the Heat on FCA Trade Enforcement

In the span of one week, the Department of Justice (DOJ) announced two major multimillion-dollar False Claims Act settlements centered on alleged customs-duty evasion—an unmistakable sign that trade enforcement continues to be a major priority for the Trump Administration. As we previously reported, DOJ announced the creation of a cross-agency Trade Fraud Task Force to focus on enforcement of tariff evasion and importation of prohibited goods late last year, which is referenced in DOJ’s press releases for these settlements.

Canadian Steel Companies and Owner - $19 Million

On May 20, 2026, DOJ announced that two Canada-based steel companies, Royal Canadian Steel Inc. and Farjess Inc., along with their part-owner and president, Feroz Jessani, agreed to pay $19 million to resolve allegations that they avoided duties owed to the United States by knowingly misrepresenting to Customs that the country of origin of certain flat-rolled steel was Canada or the United States, when in fact they knew the true country of origin was China, Indonesia, Italy, Turkey, or Vietnam, and as a result they avoided duties owed under Section 301.

The settlement resolves a qui tam action filed by Shamsh Dhala, the CEO of a steel brokerage company that has brokered US-based importers’ purchases of steel from the defendants. He will receive approximately $3.6 million or 19% of the settlement amount.

Perfectus Aluminum - $549.5 Million

The same message comes through in the second recent settlement: California-based companies Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC and four affiliated warehousing companies agreed to pay a total of $549.5 million to resolve allegations that they violated the False Claims Act by knowingly and improperly avoiding more than $3 billion in antidumping and countervailing duties by misrepresenting to Customs that the imported steel was not subject to the duties. In August 2021, a jury in the Central District of California convicted the Perfectus Defendants of several crimes arising from the same conduct.

The settlement with the Perfectus Defendants resolves civil lawsuits filed by relators Mike Rapport, Eric Shen, and the Aluminum Extruders Council. The lawsuits were separately filed in the Central District of California and later consolidated in the case that was settled. Notably, none of the complaints filed by the separate relators included allegations of country of origin and instead focused on the antidumping and countervailing duties allegations. Relators will received 17.5% of the settlement proceeds returned to Customs.

Takeaways

Taken together, the Farjess and Perfectus settlements show that these are not isolated customs cases, but part of a broader and continued focus on using the FCA to pursue alleged tariff evasion and other trade-related misconduct following the administration’s launch of the Trade Fraud Task Force.

Companies that import goods or operate within global supply chains should expect continued scrutiny as the administration continues to deploy the FCA aggressively in support of its broader trade-enforcement agenda. 

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.