Chinese billionaire and founder of one of the world’s top aluminum companies has been indicted for evading nearly $2 billion in U.S. tariffs on products he shipped in through the Los Angeles and Long Beach ports and stockpiled in warehouses around Southern California.
Federal prosecutors in Los Angeles said Liu Zhongtian, the former chairman of China Zhongwang Holdings Ltd., masterminded a scheme in which he passed off aluminum products as “pallets” to avoid $1.8 billion in duties. Zhongtian, known as “Uncle Liu” or “Big Boss,” would then sell the materials to his own shell companies to create false demand and inflate the publicly traded company’s revenue, prosecutors said.
“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 said in a statement Wednesday. The federal grand jury indictment was returned under seal on May 7 but made public this week.
Since 2011, Liu’s company had been subject to anti-dumping tariffs and countervailing duties on aluminum extrusion products imported from China. According to prosecutors, the company avoided the duties by spot welding together its parts and calling them finished products, thereby earning an exception to tariff restrictions.
The indictment comes as trade tensions between China and the United States are on the rise. President Donald Trump attempted to boost the domestic aluminum and steel industries by imposing tariffs on the materials last year. Trump recently suggested he may delay a deal with China until after the presidential election.
Liu shipped in massive amounts of aluminum through the ports of Los Angeles and Long Beach, a major hub for U.S.-China trade.
Manufacturing, retail and trade reporter Rachel Uranga can be reached at email@example.com or (323) 556-8351. Follow her on Twitter @racheluranga.