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09/01/2010

Washington state importer pleads guilty to making false statements about Chinese honey imports

SEATTLE - A Bellevue, Wash., business man pleaded guilty last week to criminal charges for his role in a scheme uncovered by federal agents with U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) to import contaminated honey from China.

The admission of guilt by Chung Po Liu, 69, preceded the indictment Wednesday in the Northern District of Illinois where 11 individuals and six companies were charged with conspiring to import more than $40 million of Chinese honey to avoid paying anti-dumping duties of approximately $80 million. Liu was indicted in May 2009 in the Western District of Washington and has pleaded guilty to federal charges of entry of goods by means of false statements and introduction of adulterated food into interstate commerce.

Liu is a corporate officer and former president of Rainier Cascade, an import company registered with the U.S. government, as well as the president of Evergreen Produce, Inc., a business that sells and transports honey imported by Rainier Cascade. Over a three-year period starting in late 2005, Liu admitted to importing 22 shipments of honey from Changge Jixiang Bee Products Company Limited, a honey factory in Henan, China.

ICE HSI's investigation revealed that Liu purchased honey from Changge Jixiang and had it shipped to the Philippines or Thailand. The honey was re-labeled there to make it appear it was a product from these countries.

When the honey arrived in the United States, Liu submitted documents to U.S. Customs and Border Protection (CBP) officials, falsely claiming that the imported honey was produced in Thailand or the Philippines, when in fact the honey originated in China. In April 2008, federal authorities seized several of Liu's honey shipments at three locations including the Port of Seattle, a Seattle warehouse and a honey processing plant in Sultan, Wash.

Subsequent tests by the Food and Drug Administration (FDA) determined much of the honey was adulterated with the antibiotic Ciprofloxacin. This antibiotic, often found in Chinese honey, is an unsafe additive and is banned from the U.S. food supply.

In his plea agreement, Liu admitted he avoided paying in excess of $2.9 million in anti-dumping duties over three years. The duty on Chinese honey was 183 percent in 2001 and was raised to 221 percent in 2007.

"As evidenced in the investigations in Seattle and Chicago, public safety remains a high priority for HSI. While Mr. Liu's activities in this case are criminal, introducing tainted honey into our nation's food supply needlessly jeopardizes the health and safety of the American public," said Leigh Winchell, special agent in charge of ICE's Office of HSI in Seattle. "I would like to thank U.S. Attorney Jenny Durkan for her aggressive posture in assisting HSI and CBP in addressing this issue."

Under the terms of the plea agreement, Liu must forfeit $400,000 to the U.S. government. Prosecutors will recommend a sentence of up to two years in prison when he is sentenced on November 29.

The indictment in the case in the Northern District of Illinois alleges that the German-based food conglomerate Alfred L. Wolff GmbH was among five other German and Chinese companies whose employees conspired to avoid paying more than $80 million in Chinese honey Customs duties. Liu is named, but not charged in this parallel investigation.

During the course of these investigations, federal authorities have seized more than 3,200 drums of honey in Seattle, Tacoma, Wash., Minneapolis and the Chicago area.

HSI was assisted in this investigation by the Port of Seattle Police Department, the FDA Office of Criminal Investigations, CBP Office of Field Operations and the ICE attaché offices in Bangkok, Hong Kong and Manila.