A Chinese billionaire has been indicted by a grand jury in the United States on charges that he schemed with the aluminum company he founded to evade US$1.8 billion of tariffs by smuggling huge amounts of the metal into the US, Reuters reports.
Liu Zhongtian, 55, and China Zhongwang Holdings, where he served as chairman and president, were among several defendants charged in a 24-count indictment by the Los Angeles grand jury, the report said.
The May 7 indictment had been kept under seal until late Tuesday.
Liu is believed to be in China, which does not have an extradition treaty with the US. An arrest warrant has been drawn up, according to the Wall Street Journal.
Prosecutors said the alleged scheme began as early as 2008, and eventually involved efforts to escape duties imposed by the US Department of Commerce in 2011 on various types of extruded aluminum imported from China.
The indictment said companies affiliated with Liu went through ports in the Los Angeles area to import aluminum extrusions that were “tack-welded” together, to appear as finished “pallets” that were not subject to duties.
Liu would then stockpile the aluminum at four southern California warehouses, and with his associates orchestrate bogus sales to companies he controlled to inflate China Zhongwang’s financials and make it appear more valuable, according to prosecutors.
Liu, also known as “Big Boss” and “Uncle Liu” according to the indictment, was also accused by prosecutors of running a “massive” money laundering operation involving the use of shell companies to transfer funds to China Zhongwang.
US authorities said the scheme gave Liu’s companies an unfair advantage over American rivals and posed other hazards.
“Our national security is jeopardized when domestic industry loses its ability to develop and supply products for U.S. defense and critical infrastructure applications, forcing us to become dependent on unreliable imports,” Joseph Macias, special agent in charge for homeland security investigations in Los Angeles, was quoted as saying in a statement.
Liu and several other defendants face charges of wire fraud, money laundering, passing fraudulent papers through a customhouse and conspiracy.
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