Steel Wire Hanger Importer Finally Files Amended Answer After US Requests Court Sanctions
After the U.S. requested sanctions against a steel wire hanger importer for failing to respond to its complaint (see 2510300049), the importer -- being sued for allegedly dodging duties -- finally filed its amended answer Nov. 14 (United States v. Zhe “John” Liu, CIT # 22-00215, 23-00116, 24-00132).
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The case alleges that Zhe "John" Liu operated four shell companies that purported to import wire hangers from Malaysia, India and Thailand, but actually purchased them from China. A fifth shell company, also operated by Liu, then bought the hangers from those three companies and resold them to unrelated U.S. customers, the U.S. claims.
Liu has admitted to operating one company, CEK Group, but denied any involvement with the others.
He repeated his claims in his Nov. 14 amended answer. First, he again acknowledged creating CEK Group.
Then, in response to a statement in the government’s complaint that he formed another of the shell companies, Garment Cover Supply, he agreed “that he signed a document as manager as a courtesy to the owners in connection with the winding up of GCS.” But he said that, “to the best his knowledge, that GCS imported steel wire hangers from Malaysia that were manufactured in Malaysia,” and that “[a]s such hangers were the product of Malaysia the allegation is not true.”
He also denied the government’s claim that he was involved with a third shell company, GL Paper, or a fourth, AB MA.
And he challenged the government’s calculation of CEK Group’s hangers’ domestic value, calling it “contrary to law.” He also denied that his representations of his hangers’ origins represented, if not fraud, then negligence.