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Financial Crimes
06/26/2012

Chinese honey importer sentenced to 2 years for evading import duties

CHICAGO – A former Chinese business agent for several honey-import companies was sentenced Friday to two years in federal prison for illegally importing falsely labeled honey to avoid paying nearly $1.5 million in U.S. anti-dumping duties. This sentence resulted from an investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Shu Bei "Kathy" Yuan, 46, was sentenced June 22 to 24 months in prison for fraudulently importing Chinese-origin honey that was falsely identified as originating in South Korea to avoid U.S. anti-dumping duties. Yuan pleaded guilty to the charges April 23 in the Northern District of Illinois. She is also required to pay $1.48 million in restitution.

Yuan, a Chinese national, was an employee of Blue Action Enterprise Inc., a California-based honey import company. She was also employed at another related company — Honey World Enterprise Inc. — which she also used to fraudulently import Chinese-origin honey into the United States.

Between August and November 2005, Yuan fraudulently imported about 26 shipments of Chinese honey, which was falsely declared as originating in South Korea. The honey shipments had a total declared value of about $808,287, and avoided anti-dumping duties applicable to Chinese honey totaling about $1.48 million.

Yuan was arrested by HSI special agents in February 2011 and has remained in federal custody since her arrest. After she completes her prison sentence she will be turned over to ICE and placed into removal proceedings.

Yuan worked with Hung Ta Fan, aka Michael Fan, who owned and operated Blue Action, to fraudulently import Chinese honey into the United States. Fan was arrested April 1, 2010; he pleaded guilty 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. He was deported June 20 after he completed his prison sentence.

"Ms. Yuan intentionally defrauded the U.S. government of hundreds of thousands of dollars by mislabeling Chinese honey shipments," said Gary Hartwig, special agent in charge of HSI Chicago. "She did this to avoid paying import tariffs by circumventing government regulations that were put in place to protect the domestic honey industry in this country."

This case against Yuan relates to an ongoing investigation of the honey importing practices of Alfred L. Wolff Inc. (ALW), a German international trading company whose U.S. subsidiary was based in Chicago. In September 2010, a federal grand jury in Chicago indicted eight ALW executives and one non-ALW executive in an $80 million honey fraud importation ring. HSI is working with INTERPOL to pursue and apprehend the employees – all of whom are foreign fugitives – so that they may each face the charges contained in the indictment.

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 were 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, prosecuted this case.