Drugs aren’t our only Chinese problem.
A Los Angeles jury has convicted two corporate executives of conspiracy and failure to report information related to defective residential dehumidifiers that had been linked to multiple fires, in the First-Ever Criminal Prosecution for Failure to Report Under Consumer Product Safety Act (CPSC)*. Simon Chu, 68, of Chino Hills, California, and Charley Loh, 65, of Arcadia, California, were convicted of conspiracy to defraud and failure to furnish information as required by the Consumer Product Safety Act (CPSA).
“Companies and their employees should immediately report known dangerous consumer products to the Consumer Product Safety Commission so the products can be recalled as soon as possible,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will prosecute companies and their employees when they willfully put the public in harm’s way by failing to report known dangerous products.”
According to the indictment of Chu and Loh, Chu was part owner and chief administrative officer of Gree USA Inc. and another corporation in City of Industry, California, that distributed and sold to retailers for consumer purchase dehumidifiers that were made by Gree Zhuhai in China. Loh was part owner and chief executive officer of the same two corporations.
The indictment alleged that as early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also allegedly knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, the indictment alleged that Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.
The defective dehumidifiers sold by Chu and Loh’s two corporations were included in multiple recalls of a larger number of defective dehumidifiers manufactured by Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. According to the recall notices, more than 450 reported fires and millions of dollars in property damage have been linked to the recalled Gree Zhuhai dehumidifiers. The most recent recall announcements for the Gree Zhuhai dehumidifiers can be found here .
* The CPSA requires manufacturers, importers and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death. This duty also applies to the individual directors, officers and agents of those companies. The indictment alleged that as early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also allegedly knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, the indictment alleged that Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.
Two Corporate Execs Convicted for Failure to Report Under CPSA
Drugs aren’t our only Chinese problem.
A Los Angeles jury has convicted two corporate executives of conspiracy and failure to report information related to defective residential dehumidifiers that had been linked to multiple fires, in the First-Ever Criminal Prosecution for Failure to Report Under Consumer Product Safety Act (CPSC)*. Simon Chu, 68, of Chino Hills, California, and Charley Loh, 65, of Arcadia, California, were convicted of conspiracy to defraud and failure to furnish information as required by the Consumer Product Safety Act (CPSA).
“Companies and their employees should immediately report known dangerous consumer products to the Consumer Product Safety Commission so the products can be recalled as soon as possible,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will prosecute companies and their employees when they willfully put the public in harm’s way by failing to report known dangerous products.”
According to the indictment of Chu and Loh, Chu was part owner and chief administrative officer of Gree USA Inc. and another corporation in City of Industry, California, that distributed and sold to retailers for consumer purchase dehumidifiers that were made by Gree Zhuhai in China. Loh was part owner and chief executive officer of the same two corporations.
The indictment alleged that as early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also allegedly knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, the indictment alleged that Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.
The defective dehumidifiers sold by Chu and Loh’s two corporations were included in multiple recalls of a larger number of defective dehumidifiers manufactured by Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. According to the recall notices, more than 450 reported fires and millions of dollars in property damage have been linked to the recalled Gree Zhuhai dehumidifiers. The most recent recall announcements for the Gree Zhuhai dehumidifiers can be found here .
* The CPSA requires manufacturers, importers and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death. This duty also applies to the individual directors, officers and agents of those companies. The indictment alleged that as early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also allegedly knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, the indictment alleged that Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.