On September 15, the Department of Justice filed a complaint against California-based Perfectus Aluminum, accusing Perfectus of evading $1.5 billion in subsidy and dumping tariffs on Chinese imports of aluminum pallets.

According to the complaint, Perfectus is owned and controlled by Zhongtian Liu, a Chinese national, and the founder and chairman of China Zhongwang, one of the world’s largest industrial aluminum extrusion companies.

DOJ alleges Perfectus illegally imported 2.1 million aluminum pallets from Zhongwang Holdings Ltd. between 2011 and 2014. The government claims the pallets were actually aluminum extrusions, which carry a 374.15 percent countervailing duty (CVD) for the Zhongwang Group.

The complaint accused Perfectus Aluminum of merging several entities in 2014 to dispose of Zhongwang Holdings massive stockpile of aluminum. Pengcheng, Transport Aluminum, Century American Aluminum, American Apex Aluminum, Global Aluminum, Aluminum Source, and Aluminum Industrial were the Chinese companies included in the 2014 merger.

The complaint claims Liu also attempted to develop another facility in Barstow, California, by melting aluminum ballets to be sold as billet in the U.S. However, a stock analysis report alleged Liu Zhongtian of fraudulent activity, causing him to abandon the development. Instead, Liu shipped 6,337 shipping containers of pallets to Vietnam to melt the pallets and re-import the aluminum to the U.S. without having to pay Chinese duties on Vietnamese imports.

According to the DOJ, the purpose of the company’s action was not to use or sell the aluminum pallets, but instead to avoid antidumping and countervailing duties imposed by the U.S. Department of Commerce on certain types of Chinese aluminum.