Fashion and law enforcement may be strange bedfellows. But in the current government-enforcement landscape, fashion crime is in vogue. President Donald Trump’s administration’s criminal-enforcement priorities have taken shape, focusing on immigration and tariffs, as well as money-laundering offenses. It just so happens that these priority areas intersect substantially with luxury, fashion, and retail.

Below, I briefly discuss these three priority areas and then provide a few compliance takeaways so that businesses can seek to avoid the dreaded “fashion police”.

Immigration enforcement

Immigration is the Trump administration’s signature enforcement initiative. This initiative includes more than simply identifying certain individuals who are in the United States without status; it also includes investigating businesses, such as (potentially) luxury brands and fashion businesses with retail establishments or manufacturing facilities.

At the most basic level, law enforcement may wish to see if the business is complying with its I-9 obligations. Separately, and potentially far more serious, law enforcement may wish to see if the business itself has committed a crime – for example, by knowingly employing individuals without status or by exploiting such workers (a type of human-trafficking violation).

The Trump administration has ramped up unannounced visits to inspect such facilities. These can cause major disruption to a business, lead to arrests, and create exposure for the employer company.

To mitigate risk, businesses should consider having a protocol in place in the event of an unannounced visit. As in fashion, one does not want to be reactive. Such a protocol should, at a minimum, identify a point person at the facility who will be responsible for interfacing with law enforcement, institute training for public-facing staff, and provide guidance on what to say to law enforcement (and what not to say or do).

For example, law enforcement conducting visits frequently do not have search warrants authorizing them to search the premises and the business’s computers. To work around this issue, law enforcement often seeks consent to search. The request may be phrased politely and seem innocuous – e.g., “Do you mind if we look around?” Providing an incautious “Not at all” response to that question can sometimes be the difference between a discrete visit and a long-term investigation.

Tariff enforcement

The U.S. Department of Justice has made clear that rooting out fraud with respect to tariffs is a key enforcement priority. Most relevant here, tariff fraud means tariff evasion, i.e., efforts to evade higher tariffs by engaging in a scheme to defraud the government.

The real exposure for most businesses is not outright fraud but the failure to catch fraud by others that may be attributed to the business. For example, imagine that a supplier evades tariffs via a scheme, and then provides the business with goods at an appreciably lower cost compared to other suppliers. That cost differential may reflect tariff evasion, warranting an inquiry by the business. If, however, the business disregards that red flag, it could find itself accused of conspiring with the supplier.

Businesses also face risk with their customs brokers. Brokers have been found guilty of creating fake invoices with higher amounts that are provided to the company, causing millions in losses. In short, businesses face multi-directional risk.

An important way to mitigate this risk is by conducting periodic audits of invoices and customs records. Businesses should have a system of flagging notable discrepancies and following up on those findings. A high-tariff environment warrants heightened vigilance, not less.

Money laundering

Using ill-gotten gains to make luxury purchases is a form of money laundering. This type of transaction can present risk to the seller, particularly if the seller is on notice of red flags with respect to the buyer.

Consider a stylized example. Imagine that a sales associate for a luxury brand sees that a buyer has five cell phones, performs secretive hand-to-hand transactions with various individuals while loitering outside the store, and uses what appears to be coded language when on the phone. If the sales associate nonetheless allows this person to purchase $40,000 worth of luxury merchandise, the business itself may be exposed to money-laundering charges. At least one theory of liability would be that the business intended to help conceal the source of the assumed illicit funds (from drug trafficking) by facilitating the transaction and allowing the buyer to leave with merchandise (a way to conceal the source of funds). Less fraught yet similarly risky scenarios abound.

Businesses can mitigate risk by providing training to their sales associates and setting guidelines for purchases. For example, a business may decide that it will not allow a certain number of purchases by the same buyer over a defined period of time. Or the business may prohibit certain bulk purchases. In all events, the business should have a system that demonstrates its commitment to compliance in this important area – a tried-and-true way to satiate the “fashion police”.