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Monday, July 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Class Claims RICO Honey Dumping From China

CHICAGO (CN) - Businesses illegally imported Chinese honey, ducking tens of millions of dollars in anti-dumping duties and depressing prices for domestic honey, honey farms claim in two RICO class actions.

Chris Moore dba Moore's Honey Farm is lead plaintiff in one of the three class actions in Federal Court. They sued Michigan-based Groeb Farms Inc., Ernest and Troy Groeb and Horizon Partners, of Milwaukee, Wisc., and Naples, Fla., which acquired Groeb Farms in 2007.

The plaintiffs accuse the defendants of "foisting on the government and the domestic honey market illicit, low-cost Chinese honey as legitimate honey. Defendants did it with the intent to defraud the government and defraud and crowd out legitimate honey producers to defendants' financial benefit and the financial detriment of plaintiffs and class members."

The complaint adds: "In furtherance of their conspiracy, defendants and their co-conspirators (i) caused honey originating in China (and possibly other unlawful sources), including honey containing adulterated antibiotics, to be illegally transshipped through intermediate countries (including, inter alia, India, Thailand, Malaysia, and the Philippines) to the United States, (ii) falsely represented to government import authorities that the Chinese honey (a) originated in countries other than China and/or (b) was not honey, but other products, including sugars and syrups, and (iii) marketed, sold, and distributed fraudulently declared Chinese-origin honey to businesses and persons throughout the United States-to the financial detriment of Plaintiffs and Class Members." (Parentheses in complaint.)

The average price of honey sold in the United States was $1.45 in 2010, but illegally imported honey was sold as low at 75 cents a pound, the famers claim.

The American Honey Producers Association found that from 2008 to 2010, at least 80 million pounds of Chinese honey was imported without paying anti-dumping duties, cheating the U.S. Treasury of $300 million, according to the 41-page complaint.

"Defendants' conspiracy and wrongful acts inflicted severe economic hardship on plaintiffs and class members that are legitimate domestic honey producers and packers," the plaintiffs say.

The plaintiffs claim that in February this year Groeb Farms signed a Deferred Prosecution Agreement with the federal government, admitting that its "unlawful actions 'caused losses to the United States of no less than $78,866,216' in the form of unpaid antidumping duties between February 2008 and April 2012. As part of the Deferred Prosecution Agreement, Groeb Farms paid a $2 million fine to the government."

The plaintiffs seek compensation for damage to their businesses from the Groebs' illegal honey dumping.

"Defendants agreed to commit (and committed) these substantive RICO offenses through the RICO enterprise (i.e., Groeb Farms) by engaging in multiple predicate acts of mail fraud and/or interstate and/or foreign wire fraud - all the while knowing of, and intentionally agreeing to, the overall objective of the scheme to defraud and related matters as stated herein - to wit, unlawfully capturing the United States honey market, wrongfully undercutting their competition, driving their competitors out of business, and illicitly capturing for themselves the earnings and profits that otherwise would have been earned by legitimate honey producers, packers, and wholesalers," according to the complaint.

The class seeks treble damages for RICO violations, punitive damages for negligent misrepresentation and unjust enrichment, and an injunction against further illegal importation of Chinese honey.

They are represented by Ben Barnow with Barnow and Associates of Chicago.

Adee Honey Farms is lead plaintiff in the other class action, which also alleges trademark violations. It is represented by Adam Levitt with Grant & Eisenhofer.

Adee also is a co-plaintiff in the Moore complaint.

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