Yesterday, the U.S. Attorney’s Office of the Northern District of Illinois, U.S. Immigration and Customs Enforcement (ICE), and U.S. Customs and Border Protection announced sweeping criminal charges filed in federal court against two companies and five individuals that facilitated the importation and sale of illegal honey imports evading $180 million in antidumping duties.
Charges were filed against Groeb Farms, Inc. (Onsted, Michigan), described as the largest industrial honey supplier in the United States. According to the allegations filed in federal court, between 2008 and 2012, Groeb Farms purchased 1,578 container loads of Chinese-origin honey knowing that it was illegally imported into the United States, evading $78.8 million in antidumping duties. Multiple schemes had been used to evade payment of antidumping duties on the honey supplied to Groeb Farms, including falsely describing honey as sugars and syrups or, alternatively, falsely describing the honey as having originated in Malaysia, Indonesia, Thailand, Vietnam, and Mongolia.
Charges were also filed against Honey Holding I, Ltd. (Baytown, Texas), described as another large industrial honey supplier. The company was formally charged with violating the federal Food, Drug, and Cosmetic Act for its role in purchasing and reselling discounted honey described as Polish in origin that had been contaminated with chloramphenicol, a banned antibiotic.
In June 2011, an ICE Homeland Security Investigations (HSI) undercover special agent assumed the role of director of procurement at Honey Holding I, Ltd. The deferred prosecution agreement filed in Honey Holding’s criminal case indicates that the company worked with a broker since 2006 “whose primary responsibility was to locate, arrange, and source honey for Honey Holding.” This individual, Urbain Tran (who was also charged and intends to plead guilty), brokered sales by which Honey Holding “purchased Chinese-origin honey from at least seven shell and front companies that were controlled by Chinese honey producers and manufacturers . . . .” The shell and front companies included AHCOF USA Inc.; Bo Bay Corporation; Chengda Trading Limited; Glory Spring Enterprise Co., Ltd.; Pineco Import/Export Ltd.; Silver Spoon Int’l Inc.; and Sweet Campo Co., Ltd.
In the scheme alleged to have been developed by Mr. Tran, the company would “receive fake and fraudulent bills of lading, invoices, packing lists, country of origin certificates” and other documents which Mr. Tran knew to be fraudulent. The scheme is alleged to have caused losses to the United States of approximately $33,403,125, with Mr. Tran accepting payments of $330,941 from Chinese honey producers and manufacturers for his work in assisting the evasion of payment of duties.
Criminal charges were also brought against Hung Yi Lin (“Katy Lin”), who is alleged to have worked as an agent for “at least 12 importers that were controlled by Chinese honey producers and manufacturers.” According to the indictment, Ms. Lin assisted in the misclassification of honey imports thereby evading antidumping duties and honey assessment fees totaling $39.2 million.
Charges were also filed against Donald Couture, the president, owner, and operator of Premium Food Sales, Inc., described as a “Canadian broker and distributor of raw and processed honey.” Mr. Couture is alleged to have sold honey into the United States known to be contaminated with tetracycline, another banned antibiotic.
Finally, criminal charges were also filed against Jun Yang of National Honey, Inc., which did business as National Commodities Company in Houston. According to the documents filed with the federal court, the National Commodities Company was a commodities trading company “that brokered the sale of a variety of aquacultural and agricultural products to United States customers, including honey to Honey Holding.” Mr. Yang is alleged to have brokered the sale of illegal Chinese-origin honey, misrepresented as a product of India to evade the payment of $37.9 million in antidumping duties.
Although these criminal cases directly involve the importation of honey, the Southern Shrimp Alliance’s monitoring indicates that many of the same schemes were employed by related groups to import shrimp, basa, tra, swai, and crawfish tails in order to evade payment of antidumping duties and/or circumvent food safety laws. In some cases, the shell company importers of the transshipping companies implicated also imported farmed seafood products – including shrimp – claimed to be exempt from antidumping duties.
“The government’s announcement of sweeping indictments following extensive investigations of organized criminal networks is a tremendous step forward in addressing import fraud,” said John Williams, executive director of the Southern Shrimp Alliance. “The amount of money stolen from U.S. taxpayers through these schemes is stunning. And the harmful impact of trade fraud on vulnerable domestic industries is massive. On behalf of the domestic shrimp industry, we thank U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, and the United States Attorney for taking aggressive action to counter a problem that has become all too prevalent in our market.”
Read the full press release of the United States Attorney’s Office Northern District of Illinois: http://www.justice.gov/usao/iln/pr/chicago/2013/pr0220_02.html
Read U.S. Immigration and Customs Enforcement’s and U.S. Customs and Border Protection’s joint announcement: http://www.ice.gov/news/releases/1302/130220chicago.htm