The federal government is seeking to seize warehouses in San Bernardino, Riverside and Orange counties amid allegations that the company that owns them tried to avoid paying about $15 billion in tariffs by disguising the aluminum they imported from China.
The asset-forfeiture complaint was filed Thursday, Sept. 14, by the U.S. Attorney’s Office against Perfectus Aluminum.
The complaint claims that after the government instituted tariffs on aluminum that could be made into finished goods, the company tried to avoid paying the tariffs by making pallets out of the aluminum in China and then importing more than 2 million pallets to the U.S. as so-called finished goods between 2011 and 2014.
But the pallets, the government asserts, were never intended to be used as or sold as pallets. Instead, the plan was to melt them down and sell the aluminum — which would then be shaped into products.
“These pallets were not marketable or suitable for use as pallets,” the complaint said, citing the metal’s higher quality and heavier weight than are normally used for pallets. “Rather, they were manufactured as a ruse to avoid paying customs duties upon importation into the United States.”
The warehouse addresses were listed as 1001 South Doubleday Ave., Ontario; 10681 Production Ave., Fontana; 14600 Innovation Drive, Riverside; and 2323 Main St., Irvine.
A message was left with Perfectus Aluminum’s attorneys on Friday seeking comment.
In a related action, Perfectus Aluminum has filed a petition in federal court asking a judge to order the government to release scores of shipping modules that contain the company’s aluminum.
The government’s complaint says Zhongtian Liu, a Chinese national, is the founder and chairman of China Zhongwang, which makes the aluminum bars, tubes and other parts that can be made into finished products. Liu also controls Perfectus Aluminum, the complaint says.
In April 2010, a government investigation of “dumping” of aluminum imports in the U.S. at less than fair value determined that the practice was hurting the U.S. domestic aluminum industry. As a result, the Commerce Department imposed import duties of up to 400 percent on aluminum materials, including that being imported from China.
As a result, the complaint said, Zhongtian Liu sought to continue to import aluminum parts into the U.S. while avoiding the duties. That’s when the defendants disguised the aluminum parts by welding them into the shape of pallets.