Federal authorities say five people and two companies avoided duties totaling more than $180 million by illegally importing honey from China that was mislabeled as coming from other countries, or was adulterated with antibiotics not approved in honey.
In announcing the second phase of the federal investigation, the U.S. Attorney's office in Chicago said no one was injured from consuming the honey.
In June 2011, an undercover agent assumed the role of director of procurement at Honey Holding I, a defendant in the case which by then was cooperating with the investigation, a release from the U.S. Attorney's office said.
Honey Holding, doing business as Honey Solutions of Baytown, Texas, and Groeb Farms Inc. of Onsted, Mich., two of the nation's largest honey suppliers, have entered into deferred prosecution agreements, the release said. Honey Holding will pay a $1 million fine and Groeb Farms a $2 million fine, and both will implement corporate compliance programs.
The individual defendants include three honey brokers, as well as Douglas A. Murphy, former director of sales for Honey Holding; and Donald Couture, president of Premium Food Sales, Inc., a broker and distributor of raw and processed honey in Bradford, Ontario, Canada, the release said.
In 2008, federal authorities began investigating allegations of the parties circumventing honey antidumping duties through illegal imports, including mislabeling on the "supply side."
The investigation resulted in charges against 14 individuals, including executives of Alfred L. Wolff GmbH and several affiliated companies in the German food conglomerate whose U.S. honey-importing business was based in Chicago, the release said. The firms avoided some $80 million in duties on Chinese-origin honey.
Authorities seized and forfeited more than 3,000 drums of honey that entered the country illegally.
The second phase involves allegations of illegal buying, processing and trading of honey that illegally entered the U.S. on the "demand side" of the industry, according to the U.S. Attorney's office.
"These businesses intentionally deprived the U.S. government of millions of dollars in unpaid duties," said ICE Deputy Director Daniel Ragsdale. "Schemes like these result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations, with some even being put out of business."
Three of the five individuals charged have authorized the government to disclose that they intend to plead guilty.
© Copyright 2013 Sun-Times Media, LLC