Perfectus Aluminum Inc. and Related Companies Agree to Pay $549.5M to Settle False Claims Act Allegations Relating to Evaded Customs Duties

California-based companies Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC and four affiliated warehousing companies have agreed to pay a total of $549.5 million to resolve allegations that they violated the False Claims Act by knowingly and improperly evading, or conspiring to evade, anti dumping and countervailing duties owed to the United States on aluminum extrusions imported from the People’s Republic of China (China). “The President’s America First Trade Policy defends this country’s national and economic security and ensures compliance with trade laws, including the payment of tariffs intended to level the playing field for U.S. manufacturers,” said Acting Attorney General Todd Blanche. “Those who try to game the system harm American businesses and workers and will be brought to justice.” “Consistent with the goals of the Task Force to Eliminate Fraud, this settlement reflects our commitment to hold accountable those who commit fraud on the government by withholding duties that are owed on imported goods,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Civil Division will continue to zealously pursue those who attempt to evade such duties and harm U.S. manufacturing jobs.” To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are subject to duties, and the amount of duties owed. U.S. Customs and Border Protection (CBP) collects applicable duties, including anti dumping and countervailing duties assessed by the Department of Commerce. Anti dumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. During the relevant time period, aluminum extrusions from China were subject to both anti dumping and countervailing duties. The settlement resolves civil allegations that, from July 2011 through June 2014, Defendants Perfectus, Perfectus Aluminum Acquisitions, and its affiliated warehousing companies 1001 Doubleday LLC, Von-Karman Main Street LLC, 10681 Production Avenue LLC, and Scuderia Development LLC (together, “Perfectus Defendants”) knowingly made, and caused others to make, false statements on Customs Form 7501 Entry Summaries that were material to obligations to pay duties owed to CBP on extruded aluminum. The Perfectus Defendants knowingly and improperly avoided anti dumping and countervailing duties owed on more than 2.2 million aluminum extrusions in the form of “pallets,” which they misrepresented to CBP as finished merchandise not subject to anti dumping and countervailing duties. The pallets were simply aluminum extrusions that were spot-welded together to make them appear to be functional pallets. In fact, there were no customers for these pallets imported by the Defendants between 2011 and 2014, and no pallets were ever sold. On Aug. 23, 2021, a jury in the Central District of California convicted the Perfectus Defendants of Conspiracy to Commit an Offense Against the United States or Defraud the United States, among other things. United States v. Perfectus Aluminum Inc., et al., No. 2:19-cr-00282-GK (C.D. Cal.).