By STEFAN MODRICH
Law enforcement officials arrested Zheng “Miranda” Zhou, 53, of Missouri City, and Kun “Bruce” Liu, 40, of Sugar Land on Dec. 14 on charges of alleged involvement in international trade fraud violations stemming from an alleged decade-long scheme involving tires from China, according to a Dec. 15 news release from the Department of Justice (DOJ).
Zhou and Liu made their initial appearances in the U.S. District Court of the Southern District of Texas Dec. 15 in Houston, at which time the criminal indictment was unsealed, according to the DOJ. A federal grand jury returned a criminal indictment against eight individuals, according to the DOJ.
A related civil complaint has charged 14 individuals and a Missouri City-based company, Winland International Inc., in the alleged scheme. The Department of Justice’s Civil Division filed the 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, as well as Winland International Inc., which was allegedly doing business as Super Tire Inc., located just south of the intersection of Fondren Road and Sam Houston Tollway at 723 Buffalo Run.
Zhou is named as the director of Super Tire Inc. in its 1999 registry with the Texas Secretary of State, according to the Texas Comptroller’s Office.
The indictment and complaint allege the defendants conspired to avoid anti-dumping tariffs associated with off-the-road (OTR) and light vehicle and truck (LVT) tires from China, according to the DOJ. 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 U.S, the DOJ said in the release.
“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 Mark B. Dawson, a special agent in charge of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in 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.”
The value of the tires in question allegedly exceeded $20.9 million and resulted in the deprivation to the United States of more than $6.5 million in import duties, according to the DOJ.
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 allegedly 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 the defendants used these falsified records to understate the value of these tires, further lowering the amount Winland owed in duties.
“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,” Acting Assistant Attorney General Jeffery Bossert Clark said in the statement. “We recognize the importance of ensuring that U.S. manufacturers are competing on a level playing field.”
The Houston Trade/Revenue Interdiction and Enforcement Team conducted the collaborative investigation along with Customs and Border Protection’s Automotive and Aerospace Center of Excellence and Expertise with the assistance of U.S. Citizenship and Immigration Services, according to the DOJ.
“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.”