- The indictment alleges that the companies and executives imported forklifts from China, removed “Made in China” decals, rebranded them as American-made and falsely certified compliance with the Buy American and Trade Agreements Acts, both prerequisites to be awarded government contracts.
- The scheme allegedly included undervaluing imported forklifts on invoices to underpay tariffs, costing the U.S. government over $1 million in tariffs, duties, and fees between 2018 and 2024.
- The DOJ Antitrust Division’s PCSF, is leading the case, signaling the DOJ’s intent to tackle procurement fraud in trade and tariff misrepresentations in tandem with broader antitrust enforcement priorities.
- Contractors across industries, particularly in defense, manufacturing and infrastructure, should expect ongoing scrutiny around compliance with Buy American, the Trade Agreements Act, and other federal trade and tariff laws, given DOJ’s continued prioritization of eliminating government procurement fraud and evasion of tariffs and duties.
Background
The Trade Fraud Task Force is a new initiative by the DOJ and the Department of Homeland Security (DHS) aimed at intensifying enforcement against customs fraud, tariff evasion, and smuggling. The launch of the task force in August 2025 marks a significant escalation in federal efforts to combat trade and procurement fraud, particularly schemes that undermine U.S. economic and national security interests. This task force, integrating resources from the DOJ’s Civil and Criminal Divisions and DHS agencies like Customs and Border Protection and Homeland Security Investigations, is designed to aggressively pursue both civil and criminal enforcement actions against importers who evade tariffs, misrepresent product origin, or engage in customs fraud. A key priority is protecting taxpayer dollars and ensuring fair competition for American manufacturers.
The task force is actively encouraging whistleblower referrals and voluntary disclosures, signaling increased scrutiny of importers, exporters, and logistics providers. This shift toward criminal enforcement represents a significant escalation in DOJ’s approach to trade-related misconduct.
The recent DOJ indictment exemplifies these enforcement priorities. On September 30, 2025, the DOJ unsealed an indictment against two forklift companies and three of their executives for allegedly engaging in a scheme to import Chinese-manufactured forklifts, conceal their true origin, and fraudulently sell them to U.S. government agencies as American-made products.
The indictment alleges a multi-year conspiracy under the direction of the CEO, the former president, and the current president to purchase forklifts from a Chinese manufacturer and market them to federal agencies as American-made and thereby compliant with the Buy American Act. Prosecutors allege the companies removed Chinese-origin labels and inspection tags and issued fraudulent certificates of origin. The Department of Defense and DHS awarded various government contracts based on these false certifications and misrepresentations.
According to the indictment, Defendants also conspired with their Chinese supplier to undervalue forklifts on invoices for U.S. Customs clearance and avoid more than $1 million in duties and tariffs.
DOJ Assistant Attorney General for the Antitrust Division, Gail Slater, emphasized the gravity of the scheme in stating that “Defendants fraudulently hid the origins of the products they sold the government and conspired to avoid paying tariffs.”2 She promised that “[t]he Antitrust Division remains laser-focused on ensuring the American economy, including consumers and workers, is shielded from bad actors.”3 This case reflects the DOJ’s increasingly aggressive posture in pursuing procurement fraud, particularly where it intersects with antitrust and trade enforcement, and where taxpayer dollars are at risk. Many Americans view “Buy American” policies as a commitment to promote domestic manufacturing, innovation, and job creation. AAG Slater admonished the Defendants for exploiting those values for profit, forcing taxpayers to pay inflated prices for forklifts falsely marketed as American-made.4 “It means something to be made in America,” Slater emphasized. “It means American innovation and ingenuity. It also means American jobs. This DOJ will not tolerate criminals who undermine Buy American and our tariffs.”5
The case highlights the role of inter-agency collaboration. Investigative partners included the United States Army Criminal Investigative Division, Defense Criminal Investigative Service, U.S. Air Force Office of Special Investigation, U.S. General Services Administration Office of Inspector General, Department of Homeland Security Office of Inspector General, Veterans Affairs Office of Inspector General, and U.S. Defense Contract Audit Agency.
The misconduct alleged in the indictment is significant not only for its connection to fraud involving trade and tariff misrepresentations, but also because the prosecution is spearheaded by the DOJ Antitrust Division’s PCSF. Since its creation in 2019, the PCSF has served as a central hub for coordinating efforts to combat bid rigging, fraud, and collusion in public procurement across federal, state, and local levels. This case demonstrates the Strike Force’s expanding role in ensuring integrity in government-funded projects, especially where procurement intersects with antitrust priorities.
The PCSF, DOJ-DHS Trade Fraud Task Force, and the growing number of cross-agency task forces, reflect the federal government’s focus on rooting out fraud in both international trade and public procurement. These efforts mark a strategic shift toward aggressive and coordinated enforcement, blending civil and criminal authorities to pursue misconduct across multiple fronts. Federal contractors and suppliers should anticipate heightened scrutiny, particularly around compliance with trade agreements, tariff laws, and domestic sourcing requirements such as the Buy American Act. Now more than ever, companies must ensure their internal compliance programs are robust, their supply chain representations are accurate and vetted, and their customs reporting is fully aligned with applicable regulations. Proactive compliance is essential, particularly by companies that sell to the government, not only to mitigate enforcement risk, but to demonstrate a commitment to integrity in government contracting.
