Ceratizit USA LLC will pay $54.4 million to resolve allegations it evaded customs duties on tungsten carbide imports from China, amid claims of false declarations, misclassification, and unmarked goods that led to a False Claims Act suit and a whistleblower payout.
Ceratizit USA LLC, a distributor based in Charlotte, North Carolina, agreed to a $54.4 million settlement to resolve claims that it failed to pay duties on tungsten carbide products imported from the People’s Republic of China. The government alleged violations of the False Claims Act tied to incorrect origin declarations, tariff avoidance, and classification practices that reduced the duties owed. Tungsten carbide is widely used for cutting tools and other industrial parts because of its hardness and wear resistance.
Customs entries into the United States require accurate declarations about country of origin, correct tariff classification, and disclosure of duties due, including Section 301 tariffs imposed by the Office of the U.S. Trade Representative. Section 301 tariffs were applied to relevant Chinese-manufactured tungsten carbide products during the period in question, increasing the duties that should have been collected. The settlement addresses claims that those extra charges were sidestepped through misstatements and maneuvering around those tariff rules.
“Import duties are a powerful tool for protecting American industry,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “This settlement once again demonstrates that the Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by evading customs duties.” The Department of Justice pursued the civil action and coordinated with customs authorities to trace the disputed entries and duty shortfalls alleged to have occurred over multiple years.
According to the allegations, from August 2020 through March 2024 Ceratizit knowingly misrepresented the country of origin for tungsten carbide products that had been manufactured in China and transshipped through Taiwan. The claim is that those shipments were reported to U.S. Customs and Border Protection as originating in Taiwan to avoid Section 301 tariffs that applied to China. Separate allegations covered an even broader timeframe for misclassification, dating back to June 2015 through March 2024, where incorrect Harmonized Tariff Schedule codes were allegedly used to reduce duties.
“We need customs duties to protect our industries and to raise money,” said U.S. Attorney Jerome F. Gorgon Jr. for the Eastern District of Michigan. “We will use the law to support our companies and to make cheaters pay.” The government also alleged that some merchandise arrived without required country-of-origin marking and that marking duties went unpaid before the products were distributed in the U.S. market, compounding the claimed violations.
Those allegations were brought forward through a qui tam action filed under the False Claims Act, and the settlement resolves the civil lawsuit filed by the whistleblower Mark Stover. The case is captioned United States ex rel. Stover v. Ceratizit USA, et al. No. 2:22-cv-12291 (E.D. Mich.). As part of the resolution, Mr. Stover will receive approximately $9,750,000 of the settlement proceeds, reflecting the whistleblower share permitted under the statute.
“Attempts at duty evasion have always existed, regardless of the tariff environment,” said Commissioner Rodney S. Scott of U.S. Customs and Border Protection (CBP). “These schemes are vast and complex, but CBP professionals are well-trained and positioned to detect, deter, and disrupt tariff evasion schemes to ensure that duties are paid.” CBP’s enforcement and investigative work supported the government’s civil case and helped identify patterns the government says indicate intentional evasion.
On Aug. 29, 2025, the Department of Justice launched a cross-agency Trade Fraud Task Force to strengthen efforts against trade fraud that drains revenue, hurts domestic industries, and threatens consumer confidence and national security. The Task Force brings together expertise from the Civil and Criminal Divisions and from the Department of Homeland Security to pursue enforcement actions against those who evade tariffs or attempt to import prohibited goods. The resolution here was the product of a coordinated effort involving the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from CBP’s legal office.
The matter was handled by Trial Attorney James Nealon and Assistant U.S. Attorney Jonny Zajac for the Eastern District of Michigan, underlining the interagency work that produced the settlement. The agreement resolves multiple asserted theories of liability tied to origin, classification, and marking duties, and it reflects the government’s broader push to protect tariff collections and fair competition for American manufacturers. The settlement numbers and legal captions in this matter remain part of the public record as the case is closed by this civil resolution.
