Canadian Steel Firms & Executive Agree to $19 Million Settlement Over Alleged Customs Duty Evasion

Key Takeaways

• $19 Million Settlement Reached: Canada-based Farjess, Royal Canadian Steel, and executive Feroz Jessani agreed to pay $19 million to resolve False Claims Act allegations tied to unpaid customs duties on imported steel.
• Origin Misrepresentation Alleged: The Justice Department alleged the companies falsely declared certain flat-rolled steel products as originating from Canada or the United States instead of China, Indonesia, Italy, Turkey, or Vietnam.
• Whistleblower Lawsuit Triggered Investigation: The case stemmed from a lawsuit filed by broker Shamsh Dhala under the False Claims Act’s whistleblower provisions. Dhala is set to receive approximately $3.61 million from the settlement.
• Trade Enforcement Focus Intensifies: Federal officials framed the settlement as part of broader efforts to protect domestic manufacturing, enforce trade laws, and combat customs fraud.

Deep Dive

Two Canadian steel companies and one of their top executives have agreed to pay $19 million to resolve allegations that they evaded customs duties by falsely declaring the origin of imported steel products entering the United States. Canada-based Farjess, Royal Canadian Steel, and part-owner and president Feroz Jessani allegedly avoided paying duties on flat-rolled steel products by misrepresenting their countries of origin to U.S. Customs and Border Protection.

The Department of Justice says that between May 2019 and January 2025, the companies claimed certain imported steel originated in either Canada or the United States when they allegedly knew the products actually came from China, Indonesia, Italy, Turkey, or Vietnam.

The settlement also arrives amid a broader escalation in federal trade enforcement actions tied to customs fraud and tariff evasion. Earlier this year, federal authorities announced a $549.5 million settlement involving Perfectus Aluminum and affiliated companies over allegations they disguised Chinese aluminum extrusions as finished shipping pallets to evade antidumping and countervailing duties.

Assistant Attorney General Brett A. Shumate said import duties play an important role in protecting both national interests and the American steel industry, adding that the Justice Department would continue pursuing companies that fraudulently evade duties on imported steel products.

U.S. Attorney Jerome F. Gorgon Jr. pointed to the strategic importance of cross-border trade in the Detroit region, noting that roughly half of all U.S.-Canada land trade flows through the district.

Federal officials also emphasized the broader economic and supply chain implications of customs fraud.

Jonathan Restivo said the settlement demonstrated the government’s commitment to enforcing trade laws and preserving fair competition, while Homeland Security Investigations official Jared Murphey described the resolution as a “record-setting settlement” tied to efforts to protect American manufacturers and consumers from unfair trade practices.

Under U.S. customs rules, importers are required to accurately declare the country of origin, value, and applicable duties owed on imported goods. Customs duties are collected by U.S. Customs and Border Protection.

The matter originated through a whistleblower lawsuit filed by broker Shamsh Dhala, who worked with Farjess Inc. The lawsuit was filed under the False Claims Act’s qui tam provisions, which allow private individuals to sue on behalf of the United States and receive a portion of any recovery.

The case, filed in the U.S. District Court for the Eastern District of Michigan as United States ex rel. Dhala v. Royal Canadian Steel et al., alleged the companies knowingly submitted false customs information to avoid duties owed to the government.

As part of the settlement, Dhala will receive approximately $3.61 million from the recovery.

The Justice Department also linked the case to the administration’s broader anti-fraud initiatives, including the recently launched Task Force to Eliminate Fraud and the National Fraud Enforcement Division, both of which were described as part of a wider push to combat fraud, waste, and abuse involving federal programs and government revenue collection.

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