Perfectus Aluminum Agrees to $549.5 Million Settlement Over Alleged Tariff Evasion Scheme

Key Takeaways

• $549.5 Million Settlement: Perfectus Aluminum and affiliated companies agreed to pay nearly $550 million to resolve allegations they evaded antidumping and countervailing duties on Chinese aluminum imports.
• Alleged “Fake Pallet” Scheme: Federal prosecutors said the companies disguised aluminum extrusions as finished pallets by spot-welding them together to avoid tariffs, despite there being no real commercial market for the products.
• Criminal Convictions Already Secured: The settlement follows a 2021 federal jury conviction against the Perfectus defendants on conspiracy and related charges tied to the import scheme.
• Whistleblowers Triggered the Case: The matter originated from False Claims Act lawsuits filed by private relators and the Aluminum Extruders Council, who will receive a portion of the recovery.
• Trade Enforcement Pressure Is Increasing: The case underscores the federal government’s growing focus on customs fraud, tariff evasion, and protecting U.S. manufacturers through aggressive trade enforcement actions.

Deep Dive

Federal authorities have secured one of the largest False Claims Act settlements tied to customs duty evasion after a group of California aluminum companies agreed to pay $549.5 million to resolve allegations they improperly avoided tariffs on imports from China for years by disguising aluminum extrusions as ordinary shipping pallets.

The settlement focused on allegations against Perfectus Aluminum and four affiliated warehousing companies accused of evading antidumping and countervailing duties owed on Chinese aluminum imports between July 2011 and June 2014.

According to the Justice Department, the companies imported more than 2.2 million aluminum extrusions that had been lightly spot-welded together to resemble finished aluminum pallets. On paper, the imports were declared to U.S. Customs and Border Protection as completed merchandise that was not subject to steep trade duties. In reality, prosecutors alleged, the so-called pallets had no legitimate customer base, were never commercially sold, and existed largely as a vehicle to sidestep tariffs imposed on Chinese aluminum extrusions.

The claims originated from trade protections the United States imposed on Chinese aluminum extrusions during that period. Antidumping duties are designed to prevent foreign manufacturers from flooding U.S. markets with artificially cheap products, while countervailing duties are intended to offset the effects of foreign government subsidies. Customs authorities alleged the Perfectus entities knowingly made false statements on import entry forms to avoid paying those duties.

The settlement came nearly five years after the companies were convicted in a related criminal case. In August 2021, a federal jury in California found the Perfectus defendants guilty of conspiracy to commit offenses against or defraud the United States, among other charges tied to the import scheme.

Federal officials framed the resolution as part of a broader crackdown on customs fraud and trade-related misconduct.

Acting Attorney General Todd Blanche said the administration’s trade policies are intended to protect American manufacturers and workers by enforcing tariff laws and preventing companies from manipulating the system. Assistant Attorney General Brett A. Shumate said the Justice Department would continue pursuing companies that evade duties owed on imported goods, arguing that such conduct undermines domestic manufacturing jobs and harms legitimate businesses.

U.S. Customs and Border Protection also said the economic consequences of tariff evasion. Susan S. Thomas, executive assistant commissioner for CBP’s Office of Trade, said duty evasion damages companies that comply with trade laws and weakens U.S. economic security. The agency said multiple CBP offices worked alongside the Justice Department and Homeland Security Investigations during the investigation.

The announcement also ties into a much bigger federal enforcement push launched this year through the administration’s Task Force to Eliminate Fraud and the National Fraud Enforcement Division, which are initiatives aimed at increasing enforcement actions tied to fraud, waste, abuse, and improper claims involving federal programs and government revenues.

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