CHINESE NATIONAL PLEADS GUILTY IN SCHEME TO DEFRAUD UNITED STATES OVER HONEY IMPORTS
False Paperwork used to Hide Chinese Origin of Honey; One Shipment Tainted with Banned Chemical
BOA ZHONG ZHANG, a citizen of China, pleaded guilty today in U.S. District Court in Seattle to Conspiracy to Enter Goods in the United States through False Statements and to Smuggle Goods into the United States, and Introduction of Adulterated Food Into Interstate Commerce. ZHANG is a 20-year employee of a bee products company in China, who was arrested May 6, 2009, in Los Angeles while traveling in the United States. ZHANG faces up to five years in prison and a $250,000 fine when sentenced by U.S. District Judge James L. Robart on November 30, 2009.
“Submission of false customs documentation in order to avoid paying tariffs defrauds not only the U.S. government, but the public who is unaware of the scheme and unwittingly purchases the products,” said Leigh Winchell, special agent in charge of U.S. Immigration and Customs Enforcement (ICE) Office of Investigations in Seattle. “ICE will continue to aggressively investigate these crimes in order to deter this illegal activity.”
According to the statement of facts in the plea agreement, in 2005, the President of Changge Jixiang Bee Products Limited asked ZHANG to set up a transhipment scheme in the Philippines so that Chinese honey could be shipped through the Philippines to the United States to avoid the tariffs placed on Chinese honey. On behalf of Changge, ZHANG hired a company in the Subic Bay Freeport Zone, to tranship the Chinese honey to the United States. Chinese honey was unloaded at the warehouse, and re-labeled as a “Product of the Philippines.” In April 2005, ZHANG oversaw the first shipment to the United States of falsely labeled honey. Later that summer, ZHANG met with co-defendant Chung Po Liu, of Bellevue, Washington. Liu owned two companies involved in honey imports and sales. At Liu’s request, ZHANG arranged for twenty-one shipments of the falsely labeled honey valued at $1.6 million, through both the Philippines, and a similar scheme established in Thailand. Since the honey was labeled as Philippine or Thai honey, Liu avoided paying an anti-dumping tariff imposed on Chinese honey of approximately $3.3 million. One of the shipments which arrived in January 2008, was contaminated with ciproflaxin, which is an antibiotic that is not permitted to be in the food supply.
ZHANG and Liu were indicted by the grand jury on June 4, 2009. The trial for Liu is scheduled for April 5, 2010. Liu is charged with Conspiracy to Enter Goods in the United States through False Statements and to Smuggle Goods into the United States.
In addition to the charges filed in the Western District of Washington, Yong Xiang Yan, the president of the Chinese honey manufacturing company is charged in Chicago, Illinois, with conspiring to import falsely labeled honey into the U.S. for a Chicago based honey distributor. According to the charging documents, the honey’s country of origin was falsified, and some Chinese honey has been found to be contaminated with three different antibiotics.
Since 2001, anti-dumping duties have been applied to all honey imports from China. Antidumping duties are additional duties used to offset the effects of unfair trade practices that give imports an unfair advantage over competing U.S. goods. The duty on Chinese honey was 183% from 2001 to 2007, and has been 221% since 2007.
The case is being investigated by U.S. Immigration and Customs Enforcement (ICE), the Food and Drug Administration Office of Criminal Investigations and the Port of Seattle Police Department. The case is being prosecuted by Assistant United States Attorneys Mary K. Dimke and Darwin Roberts, and Special Assistant United States Attorney John Odell. Mr. Odell is an attorney with U.S. Immigration and Customs Enforcement, specially designated to handle customs cases in federal court.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.