Five individuals and two American honey-processing companies were charged with “honey-laundering” last week, the U.S. Immigration and Custom Enforcement (ICE) office under the Department of Homeland Security announced.
The federal government alleges that the accused received shipments of Chinese-origin honey that had been mislabeled and transshipped across a number of countries to avoid anti-dumping duties.
The two companies, Honey Solutions (formerly Honey Holding), of Baytown, Texas, and Groeb Farms Inc., of Onsted, Mich., have agreed to pay $1 million and $2 million in fines respectively, and to implement corporate compliance programs.
The individual defendants include three honey brokers, the former director of sales for Honey Holding and the president of Premium Food Sales Inc., a broker and distributor of raw and processed honey in Bradford, Ontario.
“These businesses intentionally deprived the U.S. government of millions of dollars in unpaid duties,” said ICE Deputy Director Daniel Ragsdale in a statement. “Schemes like this result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations, with some even being put out of business. We will continue to enforce criminal violations of anti-dumping laws in all industries so American and foreign businesses all play by the same rules.”
The investigation, nicknamed “Project Honeygate,” began as a two-part probe in 2008. The first phase netted 14 individuals – including a number of American and German corporate executives – and 3,000 illegally shipped drums of honey. Investigators estimate that the perpetrators in that case evaded $80 million in duties through their Chinese-origin honey dumping schemes.
This second chapter involved honey adulterated with antibiotics not approved by the Food and Drug Administration (FDA) for use in food products.
“We take full responsibility for and deeply regret any errors that were made in the past regarding the import of honey,” Rolf Richter, the chief executive officer of Onsted, Michigan-based Groeb Farms, said last week in a statement.
Lawmakers also responded. “This successful sting operation is sure to be a buzz kill for would-be honey smugglers,” Sen. Charles Schumer, D-N.Y., wrote in a pun-filled statement. “For too long, foreign smuggling of this product has created a sticky situation for domestic honey producers. We need a zero-tolerance policy when it comes to honey laundering.”
Honey-laundering involving Chinese-origin honey has been a problem for some time. China is the world’s largest producer of the commodity and turns out about 660 million pounds, or 25 percent of the global total, annually. For that reason, there is great incentive for the Chinese business community to unload cheap honey on the United States, a prospect made easier when American companies themselves are in on the deal.
But Chinese-origin honey can contain dangerous antibiotics. In 2010, FDA seized 64 drums of Chinese honey tainted with chloramphenicol, a drug banned from use in food products because it can cause potentially fatal anemia.
For more news go to: www.Agri-Pulse.com
#30