DETROIT -- A Chinese auto supplier reached a settlement today with the U.S. Department of Justice on claims it misclassified parts made in China to avoid $2.5 million in duties.
China Metal Products Co., which operates a North American office in suburban Detroit under the name CMAI Industries LLC, agreed to pay the federal government $6.3 million to settle the case. More than $4 million of the settlement came from assets seized during the investigation, Barbara McQuade, U.S. attorney for the Eastern District of Michigan, said in a statement.
CMAI Industries, along with several of China Metal’s international subsidiaries, participated in a scheme to falsely classify commercial truck exhaust manifolds imported from China to avoid a duty charge -- while charging customers the 2.5 percent duty.
The finished manifolds were entering the U.S. classified as unfinished, which under U.S. law is not charged a duty.
Between June 2004 and June 2011, the U.S. alleged CMAI evaded the $2.5 million in duties on parts valued at $102 million.