Aluminum Importer Pays $550M to Resolve FCA Liability Involving Important Duty Avoidance

The Department of Justice (DOJ) recently announced a landmark $549.5 million False Claims Act (FCA) settlement involving California-based Perfectus Aluminum and several affiliated warehousing entities accused of orchestrating a years-long customs duty evasion scheme tied to aluminum imports from China. The case serves as another reminder that the FCA is no longer confined to traditional healthcare or procurement fraud matters. Increasingly, the government is using the statute as a powerful enforcement tool in international trade and customs cases.

The companies allegedly evaded antidumping and countervailing duties imposed on certain Chinese aluminum extrusions by disguising the imported products as “pallets” and misrepresenting the nature of the goods entering the United States. The government alleged that the scheme allowed the companies to avoid massive customs duties owed to the United States while simultaneously inflating the revenues of a China-based aluminum manufacturer. According to the government’s press release, millions of aluminum extrusions were imported into the United States under false classifications to circumvent duties imposed by the Department of Commerce on Chinese aluminum products. The DOJ claims that the aluminum was stockpiled in warehouses throughout Southern California rather than being used as legitimate pallets or sold in the ordinary course of business.

The matter has an extensive procedural history. In 2022, six related companies were ordered to pay approximately $1.83 billion in criminal restitution after convictions arising from the same underlying scheme. The newly announced $549.5 million settlement resolves related civil liability under the FCA.
What makes this case particularly notable is not simply the size of the recovery, but what it signals about DOJ enforcement priorities moving forward. Historically, many companies viewed customs disputes primarily as regulatory matters handled through administrative channels with U.S. Customs and Border Protection. That landscape has changed dramatically. Federal prosecutors are increasingly treating customs violations, tariff evasion, and country-of-origin misrepresentations as potential fraud cases carrying enormous civil and criminal exposure.

For importers, manufacturers, distributors, and logistics companies, the implications are significant. Companies involved in international supply chains should expect heightened scrutiny not only from customs authorities, but also from federal prosecutors and whistleblowers’ attorneys. The financial exposure in these cases can be staggering because damages are often tied to unpaid duties over extended periods, and the FCA allows those amounts to be multiplied. The case also underscores the importance of supply chain transparency and customs compliance programs. Businesses importing products into the United States should ensure they have robust internal controls governing tariff classifications, country-of-origin determinations, valuation practices, and documentation submitted to customs authorities. Companies that rely heavily on third-party suppliers or intermediaries should conduct appropriate diligence to verify that imported products are accurately described and properly classified.

This case was the result of several whistleblower lawsuits filed under the FCA’s qui tam provisions. One of the lawsuits was brought by the Aluminum Extruders Council, “an international association dedicated to helping manufacturers, engineers, architects, and others to discover why aluminum extrusion is the preferred material process for better products.

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