A California-based aluminum importer and its affiliated companies have agreed to settle False Claims Act allegations that they evaded antidumping and countervailing duties on aluminum extrusions imported from China for $549.5 million. On paper, this is one of the largest customs fraud settlements in U.S. history. Let’s take a closer look at this case and the nuances of the settlement terms and the whistleblower award.
The settlement involves six defendants: aluminum importers Perfectus Aluminum Inc. and Perfectus Aluminum Acquisitions LLC, and four affiliated warehousing companies.
According to the DOJ, from July 2011 through June 2014, the defendants knowingly evaded antidumping and countervailing duties (assessed at a rate of 374.15 percent) on more than $880 million worth of extruded aluminum from China. The scheme was simple: the defendants imported aluminum extrusions that were spot-welded together to make them look like functional pallets—finished merchandise not subject to antidumping and countervailing duties—when in reality they were nothing of the sort. There were no customers for these so-called pallets, and not a single one was ever sold.
By misrepresenting the nature of the goods on Customs Form 7501 Entry Summaries, the defendants avoided the antidumping and countervailing duties that aluminum extrusions from China were subject to. This is a textbook example of customs fraud: misrepresenting imported goods to avoid paying duties owed. The government alleged that the scheme deprived Customs and Border Protection (CBP) of more than $3 billion in duties.
In August 2021, a jury in the Central District of California convicted the defendants of various crimes, including wire fraud and international money laundering. The Ninth Circuit affirmed those convictions in July 2024. Now, the government and the defendants are settling the civil False Claims Act claims.
The $549.5 million settlement figure does not reflect a cash payment by the defendants. Rather, it is comprised of two components: roughly $349.6 million from the sale of the four warehouses owned and operated by the warehousing companies, and $200 million from the sale of the 279,808 aluminum "pallets." These pallets were already subject to a 2022 criminal Forfeiture Order, following the defendants' convictions. In other words, a significant portion of the False Claims Act settlement will come from the sale of forfeited assets the Government already controls. The practical recovery for the government (and for the relators) will depend largely on what the warehouses and pallets actually sell for.
The civil settlement resolves False Claims Act lawsuits filed by three relators: Mike Rapport, Eric Shen, and the Aluminum Extruders Council. Rapport filed the first qui tam complaint in April 2015; Shen followed in July 2017; and a trade association for domestic aluminum manufacturers called the Aluminum Extruders Council filed in September 2018. The three actions were consolidated in December 2025.
Under the settlement, the relators will receive 17.5 percent of the net proceeds from the warehouse and pallet sales credited against the $549.5 million consent judgment.
This settlement is the latest in a string of DOJ enforcement actions targeting customs duty evasion under the False Claims Act. As we wrote earlier this year, the Trump Administration has made tariff enforcement a centerpiece of its trade policy, and DOJ has made clear it will use the FCA aggressively to pursue those who try to game the system.
Acting Attorney General Todd Blanche stated that those who try to game the trade system harm American businesses and workers and will be brought to justice. CBP echoed the point, noting that duty evasion is not a victimless crime. It hurts businesses that play by the rules and undermines U.S. economic security.
The government has recovered billions through FCA cases brought by whistleblowers. Whistleblowers who expose customs fraud can receive between 15 and 30 percent of what the government recovers. Anyone with knowledge of customs duty evasion—whether an employee of an importer, a customs broker, a freight forwarder, or a competitor who suspects foul play—may have a viable FCA claim.
This $549.5 million settlement sends a powerful message: customs fraud carries enormous consequences, and whistleblowers are the government's most effective partners in rooting it out. The attorneys at Whistleblower Partners have significant experience representing whistleblowers in customs fraud cases. If you have information about customs duty evasion and would like to understand your options, please contact us for a confidential consultation.
