On July 15, 2025, the United States Attorney’s Office for the District of South Carolina filed a qui tam intervenor complaint under the False Claims Act in United States ex rel. Joyce v. Global Office Furniture, LLC, et al., alleging that a South Carolina office furniture company, Global Office Furniture, submitted false invoices to Customs and Border Protection (“CBP”), evading at least $2 million in tariffs on imported goods. The company allegedly engaged in a so-called “double-invoicing scheme,” whereby an importer creates two separate invoices—one reflecting the accurate price that is used to collect payment from the purchaser, and one with a falsely reduced price that is submitted to CBP and used to calculate customs duties. The company’s former office manager filed a qui tam whistleblower complaint under seal on March 30, 2020, leading to both a civil and criminal investigation later that year.
Complaint
The government’s civil complaint charges that Defendants Malcolm Smith and his corporation, Global Office Furniture, LLC (“GOF”), violated the FCA by submitting false documents to CBP in order to underpay tariffs. In 2013, while serving as a U.S.-based sales representative for a Chinese manufacturer of office chairs, Smith incorporated GOF, which sold office chairs manufactured in China under the Amazon brand. In September 2018, after an investigation pursuant to Section 301 of the Trade Act of 1974, the United States Trade Representative (“USTR”) implemented a 10% tariff on goods imported from the Peoples Republic of China (“PRC”). On May 10, 2019, the USTR increased that tariff to 25%.
The complaint alleges that in order to evade increased tariff costs, GOF first sought approval from Amazon to raise their sales price on the imported office chairs, but received only a small concession. As a result, GOF allegedly pursued a fraudulent scheme to evade tariffs. In what is commonly known as a “double-invoice scheme,” GOF allegedly prepared two separate invoices for each shipment—one reflecting the true value of the goods imported, and one containing an undervalued amount for the imported goods that allowed GOF to pay half of the tariffs it would otherwise owe.
The complaint further alleges that after being put on notice of a government investigation, Smith instructed employees to delete relevant emails, surveyed their desks for potentially incriminating hand-written notes, and directed GOF’s technology service company to institute a 60-day auto-delete function for company emails, which would apply both prospectively and retroactively. As a result of these alleged acts, Defendants GOF and Smith are charged with claims of concealing or improperly avoiding or decreasing obligations to pay money to the government, making false records or statements material to an obligation to pay money to the government, and unjust enrichment.
False Claims Act
The FCA is the government’s primary civil litigation tool for policing fraud in federally funded programs. The statute authorizes the government to seek treble damages and per-violation penalties against those who knowingly submit or cause the submission of false claims to the government in connection with certain activities or programs. The statute also allows private parties, including whistleblowers, to file claims under seal. If the government investigates and adopts those claims, the initiating party, known as a “relator,” can share in a portion of any ultimate monetary recovery. In addition, the “reverse false claims” provision of the FCA imposes liability on a defendant who “knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” 31 U.S.C. § 3729(a)(1)(G). In order to establish that such conduct was done “knowingly,” the government need not prove specific intent to defraud. Id. Rather, it can establish liability by proving that the defendant acted with willful ignorance or reckless disregard of the truth or falsity of the information submitted to the government. 31 U.S.C. § 3729(b)(1).
The Trump administration has made clear that it views the FCA as a key tool for protecting federal funds—including in the areas of defense procurement; healthcare; life sciences; diversity, equity, and inclusion (DEI) programs; and enforcement of customs duties. For example, on July 2, 2025, the Department of Justice (“DOJ”) and the Department of Health and Human Services announced the re-establishment of a “DOJ-HHS False Claims Act Working Group.” In addition, the DOJ on March 25, 2025 announced that it had reached an $8.1 million settlement agreement with California-based importer, Evolutions Flooring, and its owners to resolve FCA claims alleging evasion of customs duties.
Observations and Implications
This FCA complaint against GOF signals the Trump administration’s focus on the FCA as a civil enforcement tool. It also underscores several points that companies should keep in mind in the current enforcement environment:
First, the complaint confirms that the Trump administration’s focus on tariff and trade issues is reflected in DOJ enforcement priorities, at both the civil and criminal levels. Indeed, on May 12, 2025, Assistant Attorney General Matthew Galeotti issued a memo identifying “trade and customs fraud, including tariff evasion” as the DOJ’s number two corporate criminal enforcement priority. Although the DOJ in the past has brought criminal prosecutions against companies that commit tariff evasion (charging them with smuggling goods, conspiracy to defraud the United States, or making false statements on customs forms), it has done so occasionally, not traditionally as a top priority. These recent announcements, however, help illustrate that priorities indeed have changed: the Trump administration is poised to aggressively use both civil and criminal enforcement tools to ensure companies’ compliance with tariffs and other trade measures.
Second, companies with international supply chains should consider reviewing and updating their compliance programs, if necessary, to ensure that customs and tariff-related issues are appropriately addressed. As part of this process, companies should consider examining their customs payment processes, giving particular attention to dealings with China-based suppliers and manufacturers. Recent reports have highlighted that increased tariffs on Chinese goods have given rise to schemes that include not only “double-invoicing” but also (i) trans-shipment of goods manufactured in China through third countries in order to conceal their Chinese origin, and (ii) misclassifying goods on customs paperwork in order to take advantage of lower tariff rates applicable to other products. Even when carried out by non-U.S. suppliers, these practices can expose U.S. companies and their employees to risks of civil and criminal liability. In many instances, U.S. companies serve as the “importer of record” for customs filings and, under CBP regulations, they are required to exercise “reasonable care” to ensure that those filings are accurate. Companies that identify customs fraud or tariff underpayments should consult counsel and consider making voluntary self-disclosures to CBP and the DOJ.
Third, companies and their counsel should be mindful that the FCA allows any private party, not just company insiders and whistleblowers, to file qui tam complaints and to share in any ultimate recovery. As noted in a recent article, this statute’s applicability to customs duties presents both litigation risks and opportunities for companies. On the one hand, companies that fail to comply with U.S. customs regulations could face financial exposure and legal risks, including parallel civil, administrative, and/or criminal inquiries. On the other hand, compliant companies and their employees who seek to ensure a level playing field in their industries can consider initiating FCA lawsuits themselves against competitors who they know or suspect are engaging in customs fraud or tariff evasion.