Racketeering Lawsuit Filed Against US, Chinese Companies That Evaded AD Duties on Sawblades
A group of interrelated diamond sawblade manufacturers and importers that had been found by CBP to be evading antidumping duties now faces allegations of racketeering in a lawsuit filed Nov. 25 in a federal court in Indianapolis. The Diamond Sawblades Manufacturers’ Coalition says the Diamond Tools Technology (DTT) and Wanbang USA, both based in the U.S., as well as China-based Wuhan Wanbang, DTT Thailand and DTT Canada, employed wire fraud and mail fraud in a conspiracy to avoid payment of AD duties.
The complaint, filed in Southern Indiana U.S. District Court, says Wuhan Wanbang, the manufacturer of the sawblades, and DTT, the importer, conspired to transship diamond sawblades through Thailand to avoid AD duties on diamond sawblades from China. They claimed Thai origin despite no manufacturing actually occurring in Thailand. CBP later found this scheme constituted evasion in an Enforce and Protect Act investigation (see 1910020026), and Commerce also found it to be circumvention (see 1907250007).
Wuhan Wanbang and DTT then moved their operation to Canada, where they set up a new affiliate, DTT Canada, and claimed Canadian origin for what were in fact Chinese-origin diamond sawblades and sawblade parts. Commerce is currently investigating circumvention by another, unrelated Canadian company that DSMC says undertook a similar scheme (see 1905020017). DSMC says the transmission to CBP of false country of origin data constituted wire fraud, and the use of the U.S. Postal Service to ship the sawblades was mail fraud.
DSMC seeks damages in an amount to be determined by a jury trial, as well as a court order barring any further evasion by DTT, Wuhan Wanbang and their affiliates. The complaint also alleges Lanham Act violations related to false designation of country of origin, and seeks triple damages under that federal law. Finally, DSMC alleges that the scheme violated Indiana unfair competition laws, and seeks punitive damages.
Email ITTNews@warren-news.com for a copy of the complaint.