Anti-Dumping Case Continues, Hearing Date Extended; Judge Orders Dissipation of Assets

After being convicted of scheming to avoid paying nearly $2 billion in customs duties, Chinese aluminum companies filed for a continuance and enjoining on October 14. Both were approved by the judge days later.

The sentencing hearing is scheduled for February 28, 2022, at 10 a.m., according to court documents.

The order states that defendants Scuderia Development, Perfectus Aluminum Inc. and Acquisitions, the collective defendants and all “persons in active concert with them who receive notice of this Order, including, but not limited to, their agents, representatives, employees, attorneys, parent companies, subsidiaries, owners and their assigns are hereby enjoined and restrained from transferring, selling, assigning, pledging, distributing, giving away, encumbering, or otherwise participating in the disposal or removal from the jurisdiction of this Court of Defendants’ assets, or taking any action [or] causing any action to be taken that might depreciate, damage, or diminish the value of Defendants’ property or rights to property for the period of time from the date of the order until 30 days beyond the sentencing hearing in this matter.”

The order lists the defendants’ assets as the warehouse properties owned by 1001 Doubleday, Scuderia Development, 10681 Production Avenue, Von Karman and the 279,808 aluminum items seized by the government.

In August, a federal jury found six businesses guilty of participating in a conspiracy to defraud the U.S. and Custom Border Protection to avoid paying large sums in customs duties. In September, the businesses moved for acquittal of all charges and a new trial.

According to the Department of Justice (DOJ), the companies attempted to avoid payments via a wire-and-customs fraud scheme where aluminum – disguised as “pallets” to avoid $1.8 billion in customs duties – was exported to the United States and were “sold” to “fraudulently inflate a China-based company’s revenues and deceive investors worldwide.”

In 2019, China Zhongwang Holdings Ltd.’s former president and Chinese billionaire, Zhongtian Liu, and several co-defendants, including affiliate company Perfectus Aluminum, were alleged to have lied to U.S. Customs and Border Protection to avoid paying $1.8 billion in anti-dumping and countervailing duties (AD/CVD) to the U.S.

The DOJ states that there were no customers for the 2.2 million pallets imported by the Liu-controlled companies between 2011 and 2014, and none were ever sold.

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