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Financial Crimes
08/04/2010

Taiwanese honey importer pleads guilty to conspiring to evade US import duties

CHICAGO - A Taiwanese executive of several honey import companies pleaded guilty Wednesday to conspiring to avoid more than $5 million in U.S. anti-dumping duties by illegally importing Chinese-origin honey that was falsely identified as coming from South Korean, Taiwan, Thailand and India. This guilty plea is part of a large-scale investigation being conducted by the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI).

Hung Ta Fan, aka Michael Fan, 40, owned and operated multiple California-based honey import companies, including Blue Action Enterprise, 7 Tiger Enterprises, Kashaka USA, and Honey World Enterprise, all of which he used to fraudulently import Chinese honey into the United States. Fan, a Taiwanese national, admitted that between 2005 and 2006 he conspired with others to illegally bring into the United States 98 shipments of Chinese honey to avoid paying anti-dumping duties of about $5,378,370 due to the U.S. government.

As part of the plea agreement, Fan further admitted that in 2009 he conspired with others to fraudulently import about $8 million of honey that was diluted and blended with 20 to 30 percent artificial sugar. He admitted to adding artificial sugar to the honey in an effort to obtain a higher price and profit margin than if the shipments contained pure honey. Fan used his company Kashaka USA to bring in the diluted, blended honey.

Fan was arrested April 1 in Los Angeles as he arrived at the Los Angeles International Airport. He has remained in federal custody since his arrest.

Fan pleaded guilty Aug. 4 before U.S. District Judge Elaine E. Bucklo, Northern District of Illinois. Sentencing is scheduled for later in the year. Fan faces a maximum penalty of five years' imprisonment and a fine up to $250,000 or twice the gross gain or loss resulting from the offense.

"This crime of mislabeling and misrepresenting imported honey was motivated exclusively by greed," said Gary Hartwig, special agent in charge of the ICE HSI Office in Chicago. "These actions defrauded the U.S. government and the American public, while providing an unfair financial advantage over law-abiding competitors."

Assistant U.S. Attorneys Andrew S. Boutros and William R. Hogan, Northern District of Illinois, are prosecuting this case.