15 named in $26 million international trade fraud scheme
HOUSTON – A federal criminal indictment was unsealed Dec. 15 against eight individuals for suspected trade fraud and 14 individuals and one company have been charged in a related civil complaint for international trade fraud violations stemming from a decade-long scheme involving tires from China.
This collaborative investigation is being conducted by the Houston Trade/Revenue Interdiction and Enforcement Team, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Houston, Texas, U.S. Customs and Border Protection’s (CBP) Automotive and Aerospace Center of Excellence and Expertise and U.S. Citizenship and Immigration Services.
Law enforcement arrested Zheng “Miranda” Zhou, 53, of Missouri City, and Kun “Bruce” Liu, 40, of Sugar Land, Dec. 14. Both made their initial appearances in Houston federal court Dec. 15, at which time the criminal indictment was unsealed.
Also charged in the indictment are 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. They are all considered fugitives and warrants remain outstanding for their arrests.
The Department of Justice’s Civil Division also filed a civil complaint Dec. 11 alleging trade fraud in the U.S. Court of International Trade. The complaint names the eight criminal defendants and six other individuals - 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 - as well as Houston area company Winland International Inc., dba Super Tire Inc. David Wang is a resident of New Jersey, while the remaining civil defendants reside in China.
“China and its industries want to rob, replicate and replace American made good and technology,” said U.S. Attorney Ryan K. Patrick. “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 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.”
The indictment and complaint allege the defendants conspired to avoid anti-dumping duties associated with off-the-road (OTR) and light vehicle and truck (LVT) tires from China. Working through and with Winland, individuals allegedly imported OTR and LVT tires from companies that were subject to anti-dumping duties associated with Chinese tire manufacturers who had engaged in unfair trade practices in the United States.
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, according to the allegations. 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 value of these tires allegedly exceeded $20.9 million and resulted in the deprivation to the United States of more than $6.5 million in import duties.
“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 B. Dawson of 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 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.”
Assistant U.S. Attorneys Suzanne Emilady and Craig Feazel of the Southern District of Texas are prosecuting the criminal case, while William Kanellis of TFTF is handling the civil matter. TFTF is an inter-agency law enforcement task force with the primary mission of identifying, interdicting and prosecuting international trade fraud.
An indictment or complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of the law.
Updated: