Chinese, Georgia, and Taiwanese Companies Conspired to Avoid Millions in Customs Duties by Bribing Officials and Transshipping Chinese Goods through Taiwan
The U.S. Attorney’s Office for the Northern District of Georgia reports that a Georgia-based paper company, its chief executive officer and its chief financial officer have been indicted in a scheme to avoid over $20 million in antidumping duties on Chinese paper products.
Jennifer Chen, chief financial officer of a Georgia-based paper supply company, was arraigned on charges of conspiracy to import paper products from China with fraudulent invoices and bills of lading and to avoid customs duties on such products. On October 17, 2012, a federal grand jury returned an indictment charging Chen, ex-husband Chi Cheng “Curtis” Gung, and their Georgia-based paper company, Apego, Ltd., with the conspiracy and twelve counts of importing notebooks and filler paper from China using false documents. Curtis Gung, chief executive officer, reported through counsel that he went to Taiwan last week for medical treatment and wished to surrender voluntarily next month.
Three leading Chinese paper manufacturers, a Taiwanese company, and their respective chief executive officers (CEOs) were also charged with the conspiracy and twelve fraudulent importation counts. Forth Wu, 69, a citizen of Taiwan and resident of Tainan, was indicted along with Fromus Psyche International, Inc. (Fromus), a Taiwanese company he owns and operates. Zuoru He, 66, a citizen and resident of the People’s Republic of China (China), was indicted along with three companies he controls and partly owns, Watanabe Paper Product (Shanghai) Co., Ltd., Watanabe Paper Product (Linqing) Co., Ltd. and Hotrock Stationery (Shenzen) Co. (collectively the Watanabe Group).
United States Attorney Sally Quillian Yates said, “Three large Chinese paper manufacturers are charged with conspiring with companies in Taiwan and Gwinnett County to avoid duties imposed by the Commerce Department to protect competition in the U.S. and global paper market. They are accused of avoiding over 20 million dollars in “anti-dumping” duties by shipping stationery made in China through Taiwan, bribing Taiwanese customs officials, and exporting the goods from there into the United States, falsely relabeled ‘Made in Taiwan.’ Now the defendant companies and their leaders face conspiracy and fraudulent importation charges for their bribery and transshipment scheme.”
“HSI’s investigation showed these individuals and the companies they worked for allegedly conspired to avoid paying proper duties on imported paper,” said Brock D. Nicholson, Special Agent in Charge of U. S. Immigration and Customs Enforcement Homeland Security Investigations in Atlanta. “Their efforts to illegally increase profits not only cheated the U.S. government out of tens of millions of dollars, they also gained an unfair advantage over other companies that play by the rules. Thanks to the hard work of HSI special agents, U.S. Customs and Border Protection and the U.S. Attorney’s Office for the Northern District of Georgia, this scheme has come to an end.”
The maximum penalty for the conspiracy charge is five years in prison, a $1 million fine for a corporation, a $250,000 fine for an individual and three years of supervised release. The maximum penalty for the fraudulent importation charges is two years in prison, a $1 million fine for a corporation, a $250,000 fine for an individual and one year of supervised release for each count.
Click here to read the complete DOJ press release.