The Counterfeit Honey Caper
SEATTLE (CN) - Six German and Chinese companies conspired to smuggle counterfeit Chinese honey into the United States, including honey contaminated with antibiotics, to duck nearly $80 million in tariffs, federal prosecutors say. A 44-count indictment in Chicago claims that 10 executives of German food conglomerate Alfred L. Wolff and the sales manager for Chinese honey exporter QHD Sanhai Honey mislabeled the honey as coming from other countries.
Some of it contained Ciprofloxacin, an antibiotic used in China but banned from the U.S. food supply, prosecutors said. The illegal presence of antibiotics does no present a danger to public health, prosecutors said in a statement.
The Department of Commerce imposed an antidumping duty on Chinese honey in 2001 to protect U.S. industry.
"The charges allege that these defendants aggressively sought and obtained an illegal competitive advantage in the U.S. honey market by avoiding payment of more than $78 million in antidumping duties, and while doing so deliberately violated U.S. laws designed to protect the integrity of our food supply," Chicago's U.S. Attorney Patrick Fitzgerald said in a statement.
"Not only was the government defrauded from collecting substantial antidumping duties, but domestic honey producers and other importers were denied a fair market, according to the indictment, and the defendants distributed adulterated honey that never should have reached the U.S. marketplace."
The indictment claims that the defendants' employees filtered the Chinese honey before it arrived in the United States, "to remove pollen and other trace elements that could indicate that the honey originated in China," and that they resold contaminated honey "that had been rejected by other customers due to the presence of antibiotics."
The conspirators tired to conceal the fraud by destroying records, including incriminating email, and communicated by telephone and in foreign languages to avoid detection by U.S. law enforcement, according to the indictment.
Prosecutors claim after one defendant learned that a shipment of honey had been seized by U.S. Customs, he emailed other defendants: "I request that all recipients not write email about this topic. Please OVER THE TELEPHONE and in German! Thank you!"
The indictment seeks forfeiture of more than $78 million in unpaid duties, $39.5 million for the value of more than 600 shipments of honey, and forfeiture of 2,441 drums of honey seized in Washington, Illinois and Minnesota. Prosecutors say 15 people have been charged in the investigation, and four Chinese or Republic of China nationals have pleaded guilty to related federal charges - two in Federal Court in Chicago and two in Seattle.