US: Chinese tycoon indicted for alleged tariff evasion

ANKARA

U.S. federal prosecutors on Wednesday said a Chinese businessman in the aluminum industry has smuggled $1.8 billion worth of metal into the U.S. in a tariff evasion scheme, and was indicted by a grand jury in Los Angeles.

According to Chinese daily South China Morning post, Liu Zhongtian, chairman of China Zhongwang Holdings Ltd., and many others were accused by the prosecutors of secretly running a number of companies in facilitating the tariff evasion since 2008 and were indicted on dozens of charges of fraud and money laundering.

“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 U.S. 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,” Hanna added.

The May 7 indictment, however, was not publicized until late Tuesday when trade delegations from China and the U.S. met in Shanghai for the first time since May on Tuesday and Wednesday to negotiate bilateral tariff policy that take its tolls on the industries of both nations for over a year.

In a statement to the Hong Kong stock exchange on Thursday, the company said they have not received any notice of the proceedings.

"The company would like to clarify that the group has always strictly abided by in its business operation the laws and regulations of the People's Republic of China and destination countries of its exported products, and has developed overseas markets under the principle of fair and orderly competition,” it said in the statement to the exchange.

Zhongwang’s shares fell as much as 20.9% on Thursday.

Arrest warrant for Zhongtian is in place, yet, he is believed to be in China, which does not have an extradition treaty with the U.S.

Liu and his family are worth $3.2 billion, according to U.S.-based Forbes magazine.

Zhongtian is expected to be sentenced to over 400-year jail term, according to U.S. laws and over 20 count indictments he is facing.