Trade Court Rejects Addition of 'Shell Company' as Defendant in Evasion Penalty Case
A request by DOJ to add an alleged "shell company" as a defendant in a fraud and evasion penalty case was denied by the Court of International Trade in an April 4 order (United States v. Zhe "John" Liu, CIT # 22-00215). "Justice does not require acceptance of the amended complaint," Judge Jane Restani said in her order. If allowed, the amended complaint would have added AB MA Distribution Corp. as a defendant alongside Zhe "John" Liu.
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The judge agreed with Liu's April 2 reply (see 2304030057) that the amended complaint would "needlessly complicate already ongoing proceedings with discovery deadlines." Additionally, she noted that administrative proceedings relating to AB MA imports are still ongoing in regard to Liu’s liability, adding that "the alleged violation by AB MA does not allege that Liu is liable to the United States."
Restani ruled that the government is not prejudiced by the denial and can file a separate complaint against AB MA.
DOJ asked the court in March to allow an amended complaint including AB MA, arguing that the company was part of Liu's "multiyear fraud scheme involving several companies," including defendant GL Paper (see 2303140046).