CHICAGO - A Chinese business agent for several honey import companies was arrested in Los Angeles Tuesday on federal charges filed in Chicago for allegedly conspiring to illegally import Chinese-origin honey that was falsely identified to avoid U.S. anti-dumping duties. The charges resulted from an investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Shu Bei Yuan, 44, was arrested in Los Angeles Feb. 15 for allegedly conspiring between 2004 and 2006 to illegally import Chinese-origin honey that was falsely identified as originating in South Korea, Taiwan and Thailand to avoid U.S. antidumping duties. Yuan appeared late Wednesday afternoon in U.S. District Court in Los Angeles.
Yuan, aka "Kathy Yuan," of the Republic of China, was an employee of Blue Action Enterprise Inc., a California-based honey import company. She was also employed at other related companies - including 7 Tiger Enterprises Inc. and Honey World Enterprise Inc., which are now defunct - which she allegedly used to fraudulently import Chinese-origin honey into the United States.
According to the indictment, Yuan worked with Hung Ta Fan, aka Michael Fan, who owned and operated Blue Action, 7 Tiger, and Honey World, to fraudulently import Chinese honey into the United States. Fan was arrested on April 1, 2010. He pleaded guilty in federal district court in Chicago in August 2010 to conspiring to illegally import Chinese honey to avoid more than $5 million in U.S. anti-dumping duties. Fan was sentenced to 30 months in prison in November 2010.
Between March 2005 and June 2006, the indictment alleges that Yuan and others allegedly caused Blue Action and 7 Tiger to fraudulently import about six shipments of Chinese honey falsely declared as originating in South Korea, Taiwan and Thailand. The six honey shipments had a total declared value of about $290,464, and avoided anti-dumping duties applicable to Chinese honey totaling about $533,872. In total, the indictment charges Yuan with five criminal counts.
"Ms. Yuan allegedly mislabeled Chinese honey shipments to avoid paying import tariffs, in essence defrauding the U.S. government of hundreds of thousands of dollars," said Gary Hartwig. "The stability of our domestic honey industry is potentially threatened when importers illegally dump low-cost Chinese honey into the U.S. marketplace. ICE HSI will continue to aggressively investigate importing schemes that circumvent government regulations and put law-abiding businesses at a disadvantage."
According to the indictment, the charges against Yuan relate to an ongoing investigation of the honey importing practices of Alfred L. Wolff Inc. (ALW), and other corporate affiliates of Wolff & Olsen, headquartered in Hamburg, Germany, including ALW Germany, ALW Honey, ALW Beijing, and ALW Hong Kong. In September 2010, a federal grand jury sitting in Chicago indicted 10 ALW executives and five ALW companies in an $80 million honey fraud importation ring. In total, the U.S. Attorney's Office in Chicago has charged 20 individuals and companies following the honey-related investigations.
In December 2001, the U.S. Commerce Department determined that Chinese honey was being sold in the United States at artificially low prices and imposed anti-dumping duties. Between June 2004 and October 2005 anti-dumping duties on Chinese-origin honey was about 183 percent. In June 2006, the rate changed to about 212 percent. However, honey originating in South Korea, Taiwan and Thailand was not subject to any anti-dumping duties.
Assistant U.S. Attorneys Andrew S. Boutros and William R. Hogan Jr., Northern District of Illinois, are prosecuting this case.
If convicted, the most serious charge in the indictment carries a maximum penalty of 20 years in prison and a $250,000 fine. The Court, however, determines a reasonable sentence to be imposed under the advisory U.S. Sentencing Guidelines.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.