Canadian steel companies agree $19 million False Claims Act settlement over U.S. customs duties

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Canadian steel $19M settlement

Highlights

Farjess Inc., Royal Canadian Steel Inc., and president Feroz Jessani will pay $19 million to settle allegations of failing to pay required U.S. duties on certain imported steel.
From May 2019 through January 2025, the companies allegedly misrepresented steel imported from China, Indonesia, Italy, Turkey, or Vietnam as originating in Canada or the United States.
Whistleblower broker Shamsh Dhala will receive approximately $3,610,000 from the settlement, as authorities highlight increased trade law enforcement and anti-evasion efforts.

Settlement terms and alleged duty evasion

As reported by the U.S. Department of Justice, Farjess Inc., Royal Canadian Steel Inc. and their part-owner and president, Feroz Jessani, agree to pay $19 million to settle allegations that they knowingly failed to pay duties owed on flat-rolled steel manufactured in Europe and Asia and imported into the United States.

The government alleges that from May 2019 through January 2025 the companies and Jessani misrepresented to U.S. Customs and Border Protection that certain steel products originated in Canada or the United States, when the actual countries of origin were China, Indonesia, Italy, Turkey or Vietnam. The settlement resolves claims brought under the False Claims Act, and the Justice Department states that the claims remain allegations only, with no determination of liability.

The civil case stems from a lawsuit filed in the Eastern District of Michigan by broker Shamsh Dhala under the False Claims Act's whistleblower provision. As part of the resolution, Dhala will receive approximately $3,610,000 from the settlement proceeds.

Trade enforcement impact and agency response

Justice Department and customs officials say the case reflects a broader push to enforce trade laws and protect domestic industry from duty evasion. Assistant Attorney General Brett A. Shumate says import duties help protect U.S. national interests and the American steel industry, while U.S. Attorney Jerome F. Gorgon Jr. points to the importance of the U.S.-Canada land trade corridor through eastern Michigan.

Acting Director Jonathan Restivo of CBP's Center of Excellence and Expertise, Base Metals, says the investigation is intended to preserve fair competition and ensure the government collects all duties owed. The Civil Division coordinates the action through the Department of Justice's Trade Fraud Task Force, with support from CBP, Homeland Security Investigations and other federal offices, as the Administration expands anti-fraud enforcement across federal programs.

Our earlier article on the appeals court ruling in the Amazon tariff-evasion case explained how the 2nd U.S. Circuit Court of Appeals refused to hold Amazon liable for alleged underpayment of tariffs and inspection fees by foreign manufacturers selling through its marketplace. We noted that the court found insufficient evidence Amazon knowingly facilitated false claims, and that below-market prices alone were not enough to prove awareness of tariff evasion—signaling limits on platform liability as tariff-related litigation expands.

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