Furniture Company Used As Front For International “Fish” Smuggling Operation

A Los Angeles-based furniture business, Kaven Company, Inc. (“Kaven”) and its owner, Kam Wing Chan, were arraigned yesterday on charges related to the smuggling of millions of dollars in endangered abalone, sea cucumber, and Totoaba into San Diego from Mexico.

The indictment alleges that Chan used Kaven, which was ostensibly an importer of Asian furniture, to purchase endangered fish in Mexico, import them into the United States, and then export them to Asia. For example, as noted in the charging documents, on various occasions, Chan smuggled: (1) 37 pounds of dried abalone (including the endangered white and black abalone) and 58 Totoaba swim bladders into the United States on October 9, 2013; (2) 20,006 pounds of sea cucumber on March 23, 2012; and (3) 1,014 pounds of abalone on January 15, 2013. The seafood was allegedly purchased in violation of Mexican law because the invoices presented did not properly demonstrate the origin of the fish.

In total, Chan and Kaven are charged with illegally exporting (from September 1, 2009 through May 30, 2013) more than $3 million in seafood to China. These exports were destined primarily to companies owned by one of Chan’s relatives.

All three smuggled fish are prized in Asia where they are considered "culinary delicacies," and often adorn the buffets of festival meals and are served at formal dinners. For example, dried-out versions of the 377 known tropical species of Sea Cucumber retail between $10 and $600 per kilogram in Hong Kong and on mainland China. One species has been reported to sell on the black market for $3000 per kilo.

According to scientists, Sea Cucumbers provide an important service for reef ecosystems. Among other things, they help to keep the sand in reef lagoons and sea grass beds fresh by turning them over, and by feeding on the dead organic matter that's mixed in with the sand, the nutrients they excrete can re-enter the biological web by algae and coral. Without the sea cucumbers, that sort of nutrient recycling could not occur. It's also thought that sea cucumbers help to protect reefs from damage due to ocean acidification. Feeding on reef sand appears to increase the alkalinity of the surrounding seawater.

Totoaba macdonaldi, also known as Cynoscion macdonaldi, is the largest species within the scaienidae family of fish. It can grow to more than 6-1/2 feet in length, weigh up to 220 pounds, and can live up to 30 years. These fish are found only in the Gulf of California, the narrow inlet between Baja California and the Mexico's mainland (also called the Sea of Cortez). The fish can be identified by its dusky silver color, elongated body, sharp snout, projecting lower jaw, and a slightly convex tail. According to the indictment, a single Totoaba swim bladder, highly prized for use in soups, can sell for $1400-$4000 in Mexico and up to ten time that amount in Asia.

Totoaba macdonaldi was included in the most protected list (Appendix 1) of species covered by the Convention on International Trade in Endangered Species (“CITES”) in 1976, and was listed as endangered under the U.S. Endangered Species Act in 1979. Both Mexico and the United States are signatories to CITES. It is a violation of law in both countries to trade in Totoaba or any part of a Totoaba.

Black abalone (Haliotis cracherodii) and white abalone (Haliotis sorenseni) are also species listed as endangered pursuant to the Endangered Species Act. Black abalone was listed as endangered on January 14, 2009, and white abalone was listed as endangered on May 29, 2001.

Mexican fisheries law (the General Law on Sustainable Fishing and Aquaculture) requires that the lawful origin of fisheries products be demonstrated by means of an arrival, harvest, production, or collection notice, an import permit, or a fisheries waybill (for transport). The failure to demonstrate such lawful origin is a violation of law.

“In collaboration with our international, federal and state law enforcement partners, NOAA will do everything in its power to make sure marine resources are protected and wildlife trafficking is shut down and those who attempt to profit from the exploitation of vulnerable and threatened species are brought to justice,” said Eileen Sobeck, Assistant Administrator for NOAA Fisheries.

Kaven Company and Kam Wing Chan are scheduled to appear before United States District Court Judge Anthony J. Battaglia on February 6, 2015, at 1:30 p.m. for a hearing on all motions.

DEFENDANTS		Case Number: 14CR3662-AJB
Kaven Company		Los Angeles, CA
Kam Wing Chan	Age: 61	Monterey Park, CA
CHARGES
Count 1 Conspiracy, in violation of Title 18, United States Code, Section 371; Maximum Penalty: 5 years in custody, the greater of a $250,000 fine or twice the illegal gain or loss and a $100 penalty assessment Counts 2, 4, 5, and 7 Unlawful Importation of Wildlife, in violation of Title 16, United States Code, Sections 3372(a)(2)(A) and 3373(a)(1)(A); Maximum Penalty: 5 years in custody, the greater of a $250,000 fine or twice the illegal gain or loss and a $100 penalty assessment Counts 3 and 6 Smuggling/Importation Contrary to Law, in violation of Title 18, United States Code, Section 545; Maximum Penalty: 20 years in custody, the greater of a $250,000 fine or twice the illegal gain or loss and a $100 penalty assessment Count 8 Unlawful Trafficking in Wildlife, in violation of Title 16, United States Code, Sections 3372(a)(1)(A) and 3373(d)(1)(B); Maximum Penalty: 5 years in custody, the greater of a $250,000 fine or twice the illegal gain or loss and a $100 penalty assessment Forfeiture In violation of Title 16, United States Code, Section 3374 and Title 18, United States Code, Section 981.
INVESTIGATING AGENCIES
National Oceanic and Atmospheric Administration, Office of Criminal Enforcement; U.S. Fish and Wildlife Service, Office of Criminal Enforcement
*An indictment or complaint itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.