Posted on August 2, 2019
Chinese Billionaire Indicted in Alleged Scheme to Avoid $1.8 Billion in Anti-Dumping Duties
On Tuesday, a federal grand jury indictment was unsealed alleging a complex financial fraud scheme involving a Chinese company who exports large amounts of aluminum into the United States.
In a 53-page indictment, China Zhongwang Holdings Limited, the largest aluminum extrusion company, billionaire Zhongtian Liu, the companies former president and chairman, and several individuals lied in a U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping duties that were imposed in 2011.
Liu and his codefendant orchestrated the fraudulent sales of aluminum to Liu’s controlled companies in southern California and falsely inflated the value of the company, according to the U.S. Attorney’s Office. After the anti-dumping duties were imposed in 2011, the company’s annual reports created a false narrative that there was a robust demand for the aluminum pallets in the United States, according to the indictment.
The indictment further alleges that a massive money laundering scheme was used by the defendants to funnel hundreds of millions of dollars through shell companies to the U.S.-based aluminum companies controlled by Liu. The funds were then transferred to China Zhongwang and the other shell companies as payments for the aluminum.
“This indictment outlines the unscrupulous and anti-competitive practices of a corrupt businessman who defrauded the United States out of $1.8 billion in tariffs due on Chinese imports,” U.S. Attorney Nick Hanna stated. “The rampant criminality described in this case also posed a threat to American industry, livelihoods and investments.”
The indictment, announced earlier this week, charges all defendants with conspiracy, submitting false documents to U.S. customs, seven counts of international money laundering. If convicted Liu faces up to 425 years in federal prison.