The US Immigration and Customs Enforcement Homeland Security Investigations (HSI) and Customs and Border Protection (CBP) units vowed to step up commercial fraud investigations concerning US economic and health and safety interests.
The move follows the leveling of charges against Honey Holding, trading as honey solutions of Baytown, Texas, and Groeb Farms Inc of Onsted, Michigan – two of the largest honey suppliers in the US.
The two companies have been charged in connection with illegal imports of honey from China. In addition, three honey brokers, the former director of sales for Honey Holding, and the President of Ontario-based honey broker and distributor Premium Food Sales Inc, have also been indicted.
The charges assert the Chinese honey was misdeclared as other commodities upon import into the US and transshipped through other countries to avoid anti-dumping duties totaling more than $180m.
Honey Holdings has agreed to pay $1m in fines and Groeb Farms consented to being penalised for double that amount as a result of their activities.
“These businesses intentionally deprived the US government of millions of dollars in unpaid duties,” said ICE deputy director Daniel Ragsdale.
“Schemes like this result in legitimate importers and the legitimate honey-producing industry enduring years of unprofitable operations, with some even being put out of business.”
The outcome is the result of the first phase of a probe reaching back years into fraudulent honey trading. The second phase of the investigation, into allegations into illegal buying, processing and trading of honey entering the US illegally, has now been launched.
ICE claims some of the honey in question was adulterated with antibiotics not approved by the Food and Drug Administration for use in honey, although no public health issues resulted from this.
As early as December 2001, the Commerce Department imposed anti-dumping duties to clamp down on Chinese-origin honey being sold in the US at less than fair market value.
However, according to ICE, these duties only fuelled the black market in honey as unscrupulous firms sought to circumvent the financial penalties.
Federal authorities began investigating these activities in 2008, leading to initial indictments against 14 individuals.