A Taiwan-based manufacturer of light-emitting diodes and its Texas-based subsidiary have agreed to pay the U.S. government $5.15 million to resolve allegations that they knowingly failed to pay duties on LEDs imported from China, the Department of Justice announced Wednesday.

The settlement involves Everlight Electronics, which trades on the Taiwan Stock Exchange and ranks among the world's larger LED suppliers, and its subsidiary Everlight Americas. LEDs are critical components used across consumer electronics, automotive lighting, signage, and general illumination, making them a high-volume import category in U.S.–China trade.

The agreement comes three weeks after the Justice Department's Trade Fraud Task Force disclosed that it had surpassed $1 billion in combined civil and criminal recoveries, penalties, forfeitures, and publicly charged losses since its launch in August 2025.

The agreement resolves a whistleblower investigation into whether Everlight knowingly misrepresented the country of origin on Chinese-made LEDs between July 2018 and January 2022 to evade Section 301 tariffs on Chinese goods. Section 301 tariffs were first imposed in July 2018 under the first Trump administration on hundreds of billions of dollars' worth of Chinese imports, significantly raising costs for companies bringing Chinese-made electronics components into the United States. U.S. Customs and Border Protection alleged that Everlight was aware the products were manufactured in China and subsequently transshipped through Taiwan before being shipped to the United States. Transshipment—routing goods through a third country to obscure their true origin—is one of the most commonly investigated methods of tariff evasion under CBP's enforcement authorities. Under Section 301 of the Trade Act, the government can impose trade sanctions on foreign countries that engage in unfair trade practices harmful to domestic industries.

The settlement additionally resolves allegations that, over a period of nearly four years ending in November, Everlight continued importing LEDs from Taiwan that contained Chinese-made components which were not segregated from Taiwanese-made components during the manufacturing process. Customs fraud cases initiated by whistleblowers are typically filed under the False Claims Act's qui tam provisions, which allow private individuals to bring actions on behalf of the government and receive a portion of any recovery.

The Department of Justice established the cross-agency Trade Fraud Task Force one year ago to strengthen efforts to combat and prevent trade fraud, which deprives the government of revenue, harms domestic sellers, and undermines regulations designed to safeguard consumer safety and national security. The incentive to circumvent trade rules intensified last year after the Trump administration imposed sweeping tariffs at various levels on China and dozens of other trading partners.

The task force augments coordination between the departments of Justice and Homeland Security to pursue enforcement actions against parties that attempt to evade duties and tariffs or smuggle prohibited goods into the country through transshipment, mislabeling, and false declaration. Its mandate extends across the entire supply chain, including importers, customs brokers, downstream distributors, end-users, and others who profit from illegal imports.

"For too long, fraud actors have viewed customs violations as a mere surcharge or cost of doing business," said Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division, in a statement issued last month. "By utilizing the Department's full weight, we are making it clear that trade fraud is a serious economic crime. This billion-dollar milestone demonstrates that the United States and the National Fraud Enforcement Division will no longer allow the integrity of our country's borders and markets to be compromised for illicit profit. This message should be heard loud and clear by all supply-chain actors."

Last month, Dallas-based Seafood Supply Co. was sentenced to pay a $250,000 fine for violating two counts of the Lacey Act. According to court documents, the company falsified the country of origin of salmon sold over a two-year period, designating Chilean salmon as product from Scotland or other European countries. Chilean salmon was typically less expensive than Scottish products and therefore subject to lower duty payments.

Other major settlements secured by the Trade Fraud Task Force include the collection of $549.5 million from Perfectus Aluminum for a scheme to evade antidumping and countervailing duties on aluminum extrusions; a $6.3 million fine against Boise Cascade for illegally importing birch plywood in violation of the wildlife-focused Lacey Act; and a $54 million settlement with Ceratizit USA to resolve allegations of knowingly failing to pay duties on tungsten carbide products imported from China.