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| Defective dehumidifiers such as these were catching fire. |
Two Southern California executives were indicted after their companies allegedly ignored reports that dehumidifiers they were distributing were defective and continued selling them for months.
Simon Chu, 63, of Chino Hills, California, and Charley Loh, 60, of Arcadia, California, were charged with a multiple-object conspiracy to commit wire fraud, to fail to furnish information under the Consumer Product Safety Act (CPSA), and to defraud the U.S. Consumer Product Safety Commission (CPSC).
In addition to the conspiracy charge, the indictment also charges both defendants with one count of wire fraud and one count of failure to furnish information under the CPSA.According to the indictment, Simon Chu was part owner and chief administrative officer of two corporations in City of Industry, California, that imported, distributed, and sold to retailers dehumidifiers that were made in China. The indictment further states that Loh was part owner and chief executive officer of the same two corporations.
Despite receiving reports that their dehumidifiers were catching fire, the indictment says the two executives failed to report the defect to the government and continued to push their product to retailers.
Both defendants were facing up to 20 years in prison for the wire fraud charge and another five years for each of the conspiracy and the failure to furnish information counts. They could also have to pay a fine of at least $250,000 if convicted, the DOJ press release said.
"The importation, distribution, and sale of defective consumer products have real-world consequences, including serious injury or death,” said Nicola T. Hanna, U.S. Attorney for the Central District of California. “This indictment sends a clear message: If you plan to profit from selling defective products, you should also plan to face justice.”
In addition to the conspiracy charge, the indictment also charges both defendants with one count of wire fraud and one count of failure to furnish information under the CPSA.According to the indictment, Simon Chu was part owner and chief administrative officer of two corporations in City of Industry, California, that imported, distributed, and sold to retailers dehumidifiers that were made in China. The indictment further states that Loh was part owner and chief executive officer of the same two corporations.
Despite receiving reports that their dehumidifiers were catching fire, the indictment says the two executives failed to report the defect to the government and continued to push their product to retailers.
Both defendants were facing up to 20 years in prison for the wire fraud charge and another five years for each of the conspiracy and the failure to furnish information counts. They could also have to pay a fine of at least $250,000 if convicted, the DOJ press release said.
"The importation, distribution, and sale of defective consumer products have real-world consequences, including serious injury or death,” said Nicola T. Hanna, U.S. Attorney for the Central District of California. “This indictment sends a clear message: If you plan to profit from selling defective products, you should also plan to face justice.”
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