Two corporate executives have been sentenced to federal prison for their roles in failing to report defective dehumidifiers linked to numerous fires. This marks the first criminal enforcement action under the Consumer Product Safety Act (CPSA) against corporate executives for not reporting required information.
Simon Chu, 70, from Pomona, received a 38-month prison sentence and a $5,000 fine. Charley Loh, 67, from Arcadia, was sentenced to 40 months in prison and fined $12,000. Both were found guilty by a jury in November 2023 of conspiracy to defraud the United States Consumer Product Safety Commission (CPSC) and failure to furnish information as mandated by the CPSA.
Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division stated: “Federal law requires companies to report potentially dangerous products to the Consumer Product Safety Commission to help protect consumers from harm.” He emphasized that the Justice Department will continue its efforts against those who evade these requirements.
United States Attorney Bill Essayli commented on the accountability of corporate executives who ignore laws at the expense of public safety: “By putting profits over the safety of others, these defendants created serious risks to consumers.”
Peter Feldman, Acting Chairman of CPSC, remarked on the hazardous nature of these Chinese-made products: “Today’s sentences are a clear message that the CPSC will take a hard line against executives who break American laws and endanger families.”
The defective dehumidifiers sold by Chu’s and Loh’s corporations were part of several recalls involving products manufactured by Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. These recalls highlighted more than 450 reported fires linked to Gree Zhuhai dehumidifiers.
Chu served as part owner and chief administrative officer of Gree USA Inc., while Loh was part owner and CEO. Their corporations distributed dehumidifiers made by Gree Zhuhai despite knowing about defects since September 2012 but failed to report them for at least six months.
In April 2023, Gree USA was sentenced with a $500,000 criminal fine after pleading guilty for not notifying CPSC about issues with their dehumidifiers. This was part of a broader $91 million criminal resolution involving Gree USA and related companies.
Homeland Security Investigations led this investigation. The case was prosecuted by Assistant United States Attorney Dennis Mitchell along with Justice Department Trial Attorneys Natalie Sanders, Speare Hodges, Stephen Gripkey, and Patricia Vieira from CPSC’s Office of General Counsel.
