Chinese Billionaire-Linked Companies Convicted of Fraud in U.S.
Chinese Billionaire-Linked Companies Convicted of Fraud in U.S.
(Bloomberg) -- Six companies tied to Chinese billionaire Liu Zhongtian were convicted in the U.S. of disguising aluminum shipments to avoid paying $1.8 billion in customs duties and to boost the value of China Zhongwang Holdings Ltd.
Two California-based companies, which were controlled by Liu, bought aluminum extrusions that were spot-welded to make them appear as pallets, which weren’t subject to anti-dumping duties, and stored them in warehouses, also controlled by Liu, according to the U.S. Justice Department.
Liu orchestrated bogus sales of the aluminum to inflate China Zhongwang’s value, the Justice Department said Monday in a release. Since there was no market for pallets, Liu and Zhongwang arranged for aluminum melting facilities to be built and acquired, which were to be used to reconfigure the aluminum into a form with commercial value, the Justice Department said.
The board of China Zhongwang Holdings said in a statement that its “controlling shareholder” has “confirmed to the company that he does not control and is not a beneficial owner of the Californian companies. The controlling shareholder has further confirmed to the company that he has not been served with any legal instrument or notice in relation to the allegation.”
Liu and Zhongwang, China’s biggest producer of the aluminum used in auto parts and construction, were also charged by the U.S. but they have yet to appear in court, according to the Justice Department.
When the charges were filed in 2019, Zhongwang denied any wrongdoing and said it strictly abides by Chinese and overseas laws, and that neither it nor Liu had received notice of any legal proceedings.
The six companies are scheduled to be sentenced on Dec. 13.
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