Bethel Park company guilty in Chinese electrodes case
PITTSBURGH -A Pittsburgh-area company that supplies the steel industry has pleaded guilty to smuggling Chinese graphite electrodes into the country.
An attorney for Ameri-Source International entered the plea before a federal judge Monday.
The judge fined the company $250,000.
That’s on top of more than $2.1 million in restitution the firm as already paid to the government for importing the electrodes but lying about their size.
The federal government charges a duty of nearly 160 percent on electrodes that are less than 16 inches in diameter to stop Chinese companies from dumping cheap electrodes on the market.
Federal prosecutors said the company was falsely claiming the electrodes it imported were larger to avoid paying the duty.
The judge could have put the company on probation, but opted not to.
The owner of Ameri-Source International Inc., Ajay Goel, wouldn’t discuss the plea and said he’ll have no comment once it’s entered.
“I think it’s all in the court documents,” Goel said.
According to a two-count criminal information, the Bethel Park company was importing the electrodes -which are used to power electric arc steel furnaces – but lying about their size. That happened in April and June 2011 on shipments from Dalian, China, the documents state.
Graphite electrodes are used almost exclusively in electric arc furnaces, which must reach temperatures of 5,000 degrees Fahrenheit to melt scrap steel. The molten steel is then poured into molds so it can be recycled into other products.
The U.S. Commerce Department issued an anti-dumping order after investigating claims filed in 2008 by two American companies, Superior Graphite Company, of Chicago, and SGL Carbon LLC, of Charlotte, North Carolina. The U.S. International Trade Administration investigated and the Commerce department determined Chinese exporters were selling the smaller graphite electrodes at roughly 133 percent to 159 percent less than normal value.
As a result, the government eventually imposed a 159.64 percent duty on the smaller graphite electrodes to discourage companies from buying the Chinese products.
According to the criminal information, however, Ameri-Source avoided paying the duty by reporting the Chinese electrodes it was importing were greater than 16 inches in diameter.
The criminal charges don’t specify the value of the allegedly smuggled electrodes or how much money the company saved by avoiding the anti-dumping duty.
Graphite electrodes are used almost exclusively in electric arc furnaces, which must reach temperatures of 5,000 degrees Fahrenheit to melt scrap steel. The molten steel is then poured into molds so it can be recycled into other products.