Yesterday, Mr. Jun Yang, who operated and controlled National Commodities Company, was sentenced to three years in federal prison for illegally brokering sales of hundreds of container loads of Chinese honey, falsely labeled as Indian or Malaysian honey, to avoid the payment of antidumping duties. Mr. Yang was one of several defendants charged in a broad criminal investigation of evasion of antidumping duties and other regulations of imported foods.
Mr. Yang was described by a law enforcement official at Homeland Security Investigations as “a perpetrator of one of the largest food fraud schemes uncovered in U.S. history.” As part of his original plea agreement, Mr. Yang paid nearly $2.9 million to the United States in financial penalties. Mr. Yang’s federal prison sentence is scheduled to begin on January 15, 2014.
Public filings in the sentencing phase of the criminal trial indicated that the transshipment scheme Mr. Yang participated in was not limited to honey products. In fact, Mr. Yang claimed that his background was in the seafood industry and asserted that he had comparatively little knowledge of the honey industry. In one filing with the U.S. District Court for the Northern District of Illinois, Eastern Division, Mr. Yang’s attorneys explained that “[h]is business always was primarily focused on trading fish and seafood products.” Indeed, the bulk of the funds used to pay Mr. Yang’s financial penalties were raised through the sale of seafood he owned.
In discussing his actions, Mr. Yang observed that the same motivations that led to constructing elaborate transshipment schemes to evade antidumping duties on honey also applied to other seafood products, including shrimp. Without conceding that he participated in similar schemes to evade antidumping duties on shrimp, Mr. Yang offered the shrimp he held in inventory to government investigators. According to Mr. Yang, significant volumes of the shrimp, like some of the honey he brokered, was contaminated with banned antibiotics:
Mr. Yang agreed to hold his inventory of over 618,000 pounds of shrimp in warehouses across the country pending the government’s investigation, and incurred tens of thousands of dollars in warehouse charges to do so. He then agreed to have his entire shrimp inventory tested for the presence of antibiotics, a process which cost him nearly $20,000. When a small percentage of the samples tested positive for antibiotics, Mr. Yang consented to the destruction of over $200,000 worth of shrimp.
“Three years in federal prison is a high price to pay for the illicit profits made on evading the payment of antidumping duties,” said John Williams, executive director of the Southern Shrimp Alliance. “Mr. Yang’s sentence should give pause to those in the industry that continue to believe that there is gold in shrimp importing schemes that defraud the government. Now, more than ever, importers that continue to skirt the law by illegally importing cheap, unsafe food while pocketing the margin do so at their own peril.”
Read the U.S. Department of Justice’s Press Release on Jun Yang’s sentencing:
Read SSA’s News Alert on Jun Yang’s plea agreement: