Chinese aluminium tycoon Liu Zhongtian indicted in US over tariff evasion of US$1.8 billion
- China Zhongwang Holdings founder accused of engaging in a scheme that smuggled vast quantities of the metal into the US using firms he secretly controlled
- Fraud allegedly used fake US sales to boost the company ahead of its 2009 Hong Kong IPO
Chinese aluminium billionaire Liu Zhongtian has been indicted in the US on allegations that he evaded US$1.8 billion in American tariffs, using a complex scheme that supposedly smuggled vast quantities of the metal into the US using a series of firms that he secretly controlled.
Liu, China Zhongwang Holdings and others were indicted on dozens of charges of conspiracy, wire fraud and international money laundering.
They are also accused of defrauding investors in the 2009 Hong Kong listing of China Zhongwang, Liu’s flagship firm. The prospectus for the US$1.26 billion IPO – one the biggest in the world that year – deceptively boosted the company’s revenue by faking information about its US market via the smuggling scheme, the indictment claims.
“This indictment outlines the unscrupulous and anti-competitive practices of a corrupt businessman who defrauded the United States out of US$1.8 billion in tariffs due on Chinese imports,” said United States Attorney Nick Hanna for the Central District of California in a press release.
“Moreover, the bogus sales of hundreds of millions of dollars of aluminum artificially inflated the value of a publicly traded company, putting at risk investors around the world. The rampant criminality described in this case also posed a threat to American industry, livelihoods and investments.”
The indictment was filed by a California grand jury this May 7, but was only unsealed this week. It comes amid high-stakes trade negotiations between Washington and Beijing, which have been embroiled in a trade war for more than a year as US President Donald Trump seeks to draw down China’s trade surplus with the US.