The future of Orange County’s first big coworking site for warehouse users appears to be in flux, after the owners of the prominent building in Irvine that’s home to the shared-space facility were caught up in a federal tax evasion scheme that made national headlines last week.
Liu Zhongtian, a Chinese billionaire who founded Asia’s largest aluminum extrusion company, China Zhongwang Holdings Ltd., was, along with other defendants, accused of employing a scheme to avoid paying $1.8 billion in tariffs by disguising a major stockpile of aluminum it owned as pallets and smuggling the material into the United States, according to a federal indictment.
Much of the smuggled aluminum passed through the Ports of Long Beach and Los Angeles. They were stored at a handful of Southern California facilities, according to the grand jury indictment, which was reached in May but not unsealed until last week.
Those facilities include Irvine’s 2323 Main Street, a 260,850-square-foot building at the intersection of Main Street and Von Karman Avenue, not far from John Wayne Airport.
A limited liability company that the government contends has ties to Liu bought the Irvine property in 2009.
The Business Journal first reported on the site’s apparent ties to the alleged scheme in 2016, after a line of freight trucks began queuing up to load or unload shipments of what appeared to be aluminum pallets.
Seizure Planned
Last week’s indictment indicated that the government is seeking the criminal forfeiture of the warehouses and the seized aluminum.
In 2017, the United States Attorney’s Office filed civil forfeiture actions against the Southern California warehouses in a related case. That litigation had been stayed pending the completion of the criminal prosecution now picking up steam.
The 24-count indictment made public last week also is seeking jail time for Liu and other defendants from China, on charges of conspiracy, wire fraud, and money laundering, among other offenses.
The government indicated one related person located in Los Angeles had pled guilty to tax evasion charges, but none of the other named defendants are believed to be in the U.S.
In addition to smuggling the aluminum into the country, prosecutors allege that Liu, also known as “Uncle Liu” or “Big Boss,” would sell the materials to his own shell companies to create false demand and inflate the revenue for his publicly traded company in China.
Shared Space
The Irvine building’s stockpile of aluminum is no longer there; the site, seemingly underused for the better part of a decade despite the building’s prominent location and record low levels of industrial vacancy, has for the past five or so months been marketed for lease by CubeWork, a shared-space warehouse operator.
Company marketing materials state that CubeWork specializes in “standard and customizable commercial and warehousing space,” available for immediate use and offering spaces ranging from a few hundred square feet to 10,000 square feet and more that are “suitable for general warehousing to production/light manufacturing.”
The company leases each of its locations from the property’s owner and builds out “cubes” within them for smaller users to sublease and use.
The Irvine location is the first in OC for CubeWork. Its website lists forthcoming locations in Anaheim, Garden Grove, and Huntington Beach.
It also lists nearly 20 open or planned locations in Los Angeles and the Inland Empire. A few of those IE sites are among others the government has cited as being involved in the aluminum scheme.
State records show CubeWork to be based in City of Industry, and headed by William Chang, who previously worked at a small e-commerce company, according to news reports.
CubeWork has been in business for about a year, and last year filed registration documents pertaining to a $7 million round of funding, according to regulatory filings.
