A criminal case and separate civil complaint allege a Texas tire distributor has spent the last decade scheming to avoid paying tariffs on tires imported from China.
A federal grand jury in Houston indicted eight individuals, while a related civil complaint charged those eight people plus six more, and Winland International Inc. dba Super Tire Inc., of international trade fraud.
According to a release from the U.S. Department of Justice, Zheng “Miranda” Zhou, 53, of Missouri City, and Kun “Bruce” Liu, 40, of Sugar Land, were arrested and made their initial appearances in a Houston federal court.
Six others were charged. Warrants remain outstanding for their arrests: Qinghua “Shirley” Song, 44, of Jurupa Valley, California; and Chinese residents Yue “Joanna” Peng, 42, Li “Cathy” Chen, 38, Xin “Devin” Zhang, age unknown, Shaohui “Jasper” Jia, 40, and Deng “David” Yongqiang, 36.
The civil complaint, filed with the Justice department's civil division additionally names six more defendants: Xiaozhen “Jenny” Zhang, 34, Di “Terry” Wang, 34, Liang “Leon” Yu, 49, Lin “Leo” Zhang, 37, Jinbing “David” Wang, 36, and Minglian “Bill” Li, 28. David Wang is a resident of New Jersey, while the remaining civil defendants reside in China.
“The Civil Division, through the Department of Justice’s Trade Fraud Task Force (TFTF), will continue to partner with U.S. law enforcement agencies and U.S. Attorneys’ Offices to aggressively investigate and pursue individuals and companies who attempt to evade U.S. customs laws and target the U.S. manufacturing base with unfair trade practices,” said Acting Assistant Attorney General Jeffery Bossert Clark. “We recognize the importance of ensuring that U.S. manufacturers are competing on a level playing field.”
U.S. Attorney Ryan Patrick for the Southern District of Texas, said, “China and its industries want to rob, replicate and replace American made good and technology. Illegally importing and dumping these goods is one way to systemically weaken American competitors. Whether direct espionage by the Chinese government or trade fraud like in this case, we will continue to investigate and prosecute every case we can.”
The indictment and complaint allege the defendants conspired to avoid anti-dumping duties associated with off-the-road and light vehicle and truck tires from China. Working through and with Winland, individuals allegedly imported the tires from companies that were subject to anti-dumping duties. (Read the criminal complaint here.)
The complaint further alleges U.S.-based defendants conspired with defendants in China to obtain falsified invoices and entry records of Chinese tire companies that were subject to a lower duty rate than the actual manufacturers of these tires. Defendants submitted these falsified records to U.S. Customs officials when importing tires into the United States so that Winland could avoid paying the higher duty rates. The indictment and complaint also allege they used these falsified records to understate the value of these tires, further lowering the amount Winland owed in duties.
The Justice department estimates the value of the tires at more than $20.9 million, and said the U.S. was deprived of more than $6.5 million in tariffs.
“For more than a decade, Zhou and her co-conspirators are alleged to have sought to gain an unfair competitive advantage at the expense of U.S. companies and consumers through a series of schemes in violation of fair trade practices and U.S. import regulations,” said Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) - Houston. “Working closely with our U.S. and foreign law enforcement partners, and in coordination with the National Intellectual Property Rights Coordination Center, we were able to uncover these alleged deceptive practices leading to the criminal indictment and imposition of almost $21 million in civil penalties.”
“Customs and Border Protection (CBP) takes its trade mission of protecting the U.S. economy very seriously as we strive to maintain fair trade and preserve American jobs from predatory practices,” said CBP’s Director of Detroit Field Operations Christopher Perry. “These civil penalties and criminal indictments should serve as a warning to those who attempt to defraud our government and do harm to our economy and American businesses.”
