SoCal Companies Ordered to Pay $1.83B Restitution in Aluminum Fraud Case

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LOS ANGELES (CNS) - A group of six Southern California businesses run by a fugitive Chinese billionaire was ordered today to pay $1.83 billion in restitution for scheming to evade payment of duties on imported aluminum products from China.

The companies participated in the scheme to disguise aluminum extrusions to look like pallets, which weren't subject to anti-dumping duties imposed in 2011. They were simply spot-welded together so that they would appear in the shape of pallets, and stockpiled at four large warehouses, according to the U.S. Attorney's Office.

U.S. District Judge R. Gary Klausner held Perfectus Aluminum Inc. and five related entities liable for restitution to the U.S. Customs and Border Protection.

The defendants are:

-- Perfectus Aluminium Inc., an Ontario-based business

-- Perfectus Aluminium Acquisitions LLC, a subsidiary of Perfectus Aluminium formed in 2014 to oversee several companies that received aluminum pallets shipped to the United States after duties were imposed on Chinese aluminum in 2011

-- Scuderia Development LLC, which owns a warehouse in Riverside

-- 1001 Doubleday LLC, which owns a warehouse in Ontario

-- Von Karman -- Main Street LLC, which owns a warehouse in Irvine

-- 10681 Production Avenue LLC, which owns a warehouse in Fontana.

At the conclusion of a nine-day trial in August 2021, a federal jury in Los Angeles found the companies guilty of one count of conspiracy, nine counts of wire fraud and seven counts of passing false and fraudulent papers through a customhouse. The Perfectus Aluminium defendants also were found guilty of seven counts of international promotional money laundering.

``The Perfectus and Warehouse defendants were integral participants in this conspiracy,'' prosecutors wrote in a sentencing memorandum. ``Indeed, they existed only to perpetrate it.''

The vast majority of the pallets were imported through the ports of Los Angeles and Long Beach.

Zhongtian Liu, 58, a billionaire Chinese citizen who is a former Tustin resident, and the former president and former chairman of the board of China Zhongwang Holdings Ltd. -- Asia's largest manufacturer of aluminum extrusions -- has yet to appear in court in the United States to face criminal charges.

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