The United States Department of Justice (DOJ) announced a nineteen million dollar settlement on May 20 2026, to resolve allegations under the False Claims Act regarding evaded customs duties.
Two Canadian steel companies and their ownership will pay the federal government to settle claims of fraudulently dodging import tariffs on flat rolled steel.
From May 2019 through January 2025 Farjess Incorporated and Royal Canadian Steel Incorporated allegedly claimed their imported steel originated in Canada or the United States, when the true origin of the materials was actually China, Indonesia, Italy, Turkey or Vietnam.
This settlement sends a clear signal that the federal government will aggressively pursue companies that lie to border officials to avoid paying required duties.
The Department of Justice’s recently empowered Trade Fraud Task Force is now utilizing data-driven anomaly detection to uncover these exact supply chain discrepancies, actively shifting customs enforcement from basic administrative fines to severe civil liabilities.
Now, mid-market buyers and domestic importers face an escalated operational reality where they must transition from transactional customs processing to comprehensive, programmatic audits of their tier-two suppliers to survive federal scrutiny.
A former broker for the companies blew the whistle on the operation and will receive approximately $3.6 million of the settlement proceeds.
This massive payout highlights the financial incentive for private citizens to report corporate trade fraud directly to federal authorities.
The civil enforcement action supports a broader administration initiative called the Task Force to Eliminate Fraud which targets supply chain vulnerabilities that deprive the government of revenue.
Farjess Incorporated and Royal Canadian Steel Incorporated take the immediate financial hit.
Company president and part owner Feroz Jessani is also personally liable in the $19 million settlement.
Works Cited
"Restructured and Additional Section 232 Tariffs on Aluminum, Steel, and Copper." Perkins Coie, Perkins Coie LLP, 8 Apr. 2026, perkinscoie.com/insights/update/restructured-and-additional-section-232-tariffs-aluminum-steel-and-copper.
"New Head of DOJ Trade Fraud Task Force Signals Aggressive Enforcement Shift." Mayer Brown, Mayer Brown, 24 Feb. 2026, mayerbrown.com/en/insights/publications/2026/02/cody-herche-new-head-of-doj-trade-fraud-task-force-signals-aggressive-enforcement-shift.
"DOJ and DHS Launch Joint Trade Fraud Task Force: What Multinational Companies Need to Know." Thompson Hine LLP, Thompson Hine LLP, 9 May 2025, thompsonhine.com/insights/doj-and-dhs-launch-joint-trade-fraud-task-force-what-multinational-companies-need-to-know/.
"US Tariff Evasion Enforcement 2026: Why the Legitimate Importer Is Now at Risk." Carra Globe, 10 May 2026, carraglobe.com/us-tariff-evasion-enforcement-2026/.
