Two companies and three people were convicted in Australia of customs fraud and fined $580,200 over an elaborate international import/export scam involving 1.7 million liters of honey that was shipped to the United States.
The fraud was part of a worldwide scam to circumvent anti-dumping duties imposed on Chinese honey by the U.S.
The honey was exported from Australia to the U.S. as an Australian-made product, but was actually from China.
Australian Customs Service investigations national manager Richard Janeczko says the investigation was lengthy and complex.
"This degree of complex fraud can be challenging to detect, investigate and prosecute,” he says. “Commercial fraud of this type also has potential to damage Australia's relationship with our major trading partners."
Between July 2001 and June 2002, some 28 consignments of Chinese honey were imported into Australia by CHS Enterprises Pty. Ltd. and JHM Trading Co. in 125 shipping containers.
The two companies claimed the honey was from Singapore – which does not have honeybees.
Australian Customs said the honey, packed in 200-litre drums, was relabeled as Australian product by the importer and repacked for export. It was not blended with Australian honey and it did not undergo any other form of processing.
The honey was then exported in 39 shipments to the U.S. described as Australian product.
An investigation by Customs officers found JHM Trading Co. was bogus.
CHS Enterprises Pty. Ltd. and its freight forwarder AK Unicargo International Pty. Ltd. were charged with 38 offenses under the Customs Act 1901 and 58 offenses under the Commerce (Trade Descriptions) Act 1905.
Also charged were Robin Hu, his then wife, Hui Min Jing, and Gordon (Pui) Lam.
Jing pleaded guilty to all charges in the New South Wales Supreme Court and agreed to assist Customs with its inquiries. She was fined $129,200.
At a subsequent Supreme Court trial, Lam and AK Unicargo were found guilty of all charges. Hu and CHS Enterprises were found guilty of charges relating to the original importation of the honey.
The court imposed fines and costs against the two men and companies totaling $451,200.