ESG Enforcement Tracker

A group of California-based companies (including Perfectus Aluminum, Inc. and Perfectus Aluminum Acquisitions, LLC) have agreed to pay US$549,594,030 to resolve civil claims brought by the DOJ arising from a large-scale customs fraud scheme. The settlement reflects a material governance failure involving the falsification of customs documentation, evasion of import duties, and inadequate compliance controls over aluminium extrusions imported from the People’s Republic of China.

The underlying conduct involved misrepresenting the origin or classification of imported aluminium to avoid countervailing and antidumping duties – trade remedies imposed by the United States since 2011 to protect domestic manufacturers from perceived unfairly priced and/or subsidised Chinese imports. US authorities estimate that unpaid duties in related criminal proceedings amounted to approximately US$3 billion. Several defendants were convicted of conspiracy to defraud the United States and criminal restitution of US$1.836 billion was ordered. The civil settlement, which resolves overlapping administrative and civil monetary claims arising from the same conduct, does not extinguish criminal liability, individual liability, or outstanding tax obligations.

The settlement proceeds reflect asset realisations, including warehouse property sales and seized aluminium inventory.

The case was initiated under the False Claims Act, which permits private individuals (known as whistleblowers or “relators”) to file suits on behalf of the federal government and share in any recovery. Three relators – Michael Rapport, Eric Shen, and the Aluminum Extruders Council (an industry trade body) – brought the action and are entitled to a 17.5% share of the settlement sum.