Aluminum and copper shipments that federal authorities allege
were smuggled between the United States and Mexico as part of a
"carousel" scheme have been seized by the U.S. Department of
The material was
seized after an investigation into metal shipped between
Mexicos Recuperaciones Industriales Internacionales SA de
CV (RIISA) and three U.S.-registered companies: Equus Steel
International LLC, Steel Bird Brokers LLC and BE-CA Copper LLC,
according a complaint filed in federal court in June by Kenneth
Magidson, U.S. attorney for southern Texas.
Also involved in the
alleged scheme was Red White & Blue Logistics Inc. Laredo,
Texas, which federal investigators said received and
inventoried overvalued metal imported by RIISA from Mexico
before shipping the material to an Equus warehouse in San
Antonio, Texas. The metal was then exported to Mexico at
below-market prices, according to court documents.
RIISA declined to
comment July 1, and AMM couldnt locate contact
information for Equus, Steel Bird or BE-CA.
"RIISA had created a
scheme in cooperation with Equus, Steel Bird and BE-CA to
import and export the same metals from Mexico to help correct a
trade imbalance that RIISA had with Mexican Customs maquiladora
program," according to documents filed with the court by a
Mexican law firm representing RIISA owner Bernardo Llaguno and
Daniel Coindreau, Llagunos son-in-law and owner of Red
White & Blue. Metal was "overvalued upon import" and
"underweight upon export."
investigators accuse RIISA and the other three companies of
illegally importing 1,448 shipments of aluminum, baled copper
and copper filings in drums by using overvalued sales invoices
and false North American Free Trade Agreement (Nafta)
certificates of origin stating that the metal was made in
Mexico. The aluminum and copper brought into the United States
by RIISA and sold to Equus, Steel Bird and BE-CA was then
resold to RIISA at "below market prices," according to federal
investigators. When the metal was exported to Mexico, falsified
Nafta certificates indicated it was produced in the United
States and Canada.
The metal imported
from RIISA and declared as alloyed aluminum and premium
processed copper scrap was then resold to RIISA declared as
unalloyed aluminum and scrap copper, court documents said. "The
scheme created a carousel effect when the companies
imported and exported the same merchandise between the U.S. and
Aluminum ingots were
stamped with what an Alcoa Inc. employee identified as the
stamp for the Pittsburgh-based aluminum producers smelter
in Baie-Comeau, Quebec, according to court
documents. Alcoa, which is not a party in
the litigation, declined to comment.
shipments of aluminum and copper brought into the United States
through the Port of Laredo by RIIS and sold to Equus, Steel
Bird and BE-CA had a declared invoice value of approximately
$264.8 million, according to investigators. But that declared
value appears to have been inflated. For example, on March 20,
2012, RIISA imported 46,980 pounds of aluminum to the United
States at a declared value of $3.58 per pound, while the London
Metal Exchange price for aluminum was 94 cents per pound,
according to court documents.
Homeland Security investigators on Oct. 24, 2012, that he had
closed Red White & Blue, sold his fleet of trucks and moved
the aluminum and copper to an undisclosed warehouse in Laredo.
Agents learned the whereabouts of the metal and seized it on
Feb. 19, 2013.
U.S. prosecutors in
June issued a forfeiture notice for metal seized, including
three pallets of aluminum ingots, 785 aluminum T-bars, 71
pallets of copper shavings and 60 pallets of baled copper,
according to court documents. Any interested parties have until
July 23 to claim the material.