Calling him “a perpetrator of one of the largest food fraud schemes uncovered in U.S. history,” the government has thrown the book at a Houston, Tex., honey importer who weaseled out of paying $38 million in tariffs.
In 2001, the U.S. Commerce Department caught Chinese importers “dumping” honey on to the United States market — in other words, selling the commodity for significantly less than its fair market value, unfairly undercutting domestic honey makers and importers of honey from other countries.
The discovery automatically triggered “default antidumping duties” on Chinese honey. Basically, if a foreign country tries to sell a product for an unfair price in the U.S., the government slaps a steep tax on any imports of that product in the future.
In this case, the commerce department charged the Chinese an additional $2.63 per kilogram of honey entering the United States from China. That translates to an additional $1.19 per pound.
Divide $38 million by that amount and you’ll know how many pounds of Chinese honey Houston broker Jun Yang was able to sneak past customs inspectors. And that’s why Yang is going to prison for three years, in a sentence slapped on him last week.
Yang pled guilty to his role in the scheme back in March. Before getting hit with the prison sentence, he already coughed up fines and penalties totaling $2.89 million.
Yang was falsely labeling Chinese honey to make it look like it came from India or Malaysia, two countries without punitive tariffs.
He also admitted to falsifying tests that showed the Chinese honey contained chloramphenicol, an antibiotic prohibited in U.S.-sold food, because of its harmful side-effects.
Yang was one of five individuals convicted in the scheme, exposed by undercover Homeland Security agents, which is alleged to have cheated the U.S. government out of $180 million.
Douglas Murphy, former sales director for the company Honey Holdings, and Donald Couture president of the food distribution firm Premium Food Sales Inc., were among those also implicated.
Sources: Law 360, U.S. Justice Dept., Your Houston News