Chinese Aluminum Extrusion Company, Billionaire Owner Face Criminal Charges for Pallet AD/CVD Evasion Scheme
A China-based aluminum extrusion manufacturer, its owner and several related companies now face criminal charges over an alleged scheme to evade $1.8 billion in antidumping and countervailing duties by disguising their shipments of aluminum extrusions as pallets, the Department of Justice said in a press release. Chinese billionaire Zhongtian Liu and several other participants in the scheme face up to 20 years in prison on each of 23 counts listed in the indictment, though none of them are currently believed to be located in the U.S., DOJ said.
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The criminal charges come in the wake of a series of forfeiture cases that alleged Liu, his company China Zhongwang Holdings, and several other companies controlled by Liu, including Perfectus, imported aluminum extrusions but declared them exempt from AD/CV duties under an exemption for “finished merchandise” (see 1709180035). The pallets were actually unsuitable for use as such, and were instead intended to be melted down and sold in the U.S., the government said.
Once the alleged scheme was uncovered, the participants tried to export the pallets to Vietnam for melting and re-export, but the shipments were seized before they could leave the U.S. port of export. Commerce in the meantime found aluminum pallets subject to AD/CV duties in a pair of scope rulings (see 1707100006 and 1612220051), and later found circumvention of AD/CV duties by aluminum extrusions remelted in Vietnam before exportation to the U.S. (see 1905160037).
Liu and his associates are also charged with defrauding investors, including by having companies they control buy the aluminum pallets but purporting that the pallets were instead purchased by unaffiliated third parties. The corporate defendants listed in the indictment face “substantial monetary penalties” if they are convicted. Two U.S.-based defendants have already pleaded guilty to charges in a separate case of failing to declare more than $9 million in taxable income, and have agreed to cooperate in the investigation of Liu and China Zhongwang.