TWO PLEAD GUILTY TO IMPORTING, SELLING HAZARDOUS AND COUNTERFEIT CHILDREN'S TOYS

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, August 27, 2014

Two Individuals Plead Guilty to Importing and Selling Hazardous and Counterfeit Toys in New York

Two New York residents pleaded guilty today in connection with importing more than 100,000 counterfeit and hazardous children’s toys from China for sale in the United States.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Special Agent in Charge James T. Hayes Jr. of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) New York, Director Robert E. Perez of Customs and Border Protection (CBP) New York Field Operations, Chairman Elliot F. Kaye of the Consumer Product Safety Commission (CPSC) and Commissioner William J. Bratton of the New York City Police Department (NYPD) made the announcement.

“In a criminal twist on a toy story, the defendants made millions importing dangerous, knock-off toys that put children in harm’s way,” said Assistant Attorney General Caldwell. “The defendants used a continuously shifting series of corporate entities in an effort to stay one step ahead of law enforcement. But their game has now come to an end. The Department of Justice is committed to stopping those who would smuggle hazardous, counterfeit goods into the United States.”

“For eight years, the defendants lined their pockets while putting at risk the health of our children by smuggling dangerous and copyright-infringing toys into the United States,” said U.S. Attorney Lynch. “Today’s guilty pleas signify the end of this dangerous pipeline from China. We will continue to be vigilant and prosecute those who would smuggle dangerous and unlawful items into our country and neighborhoods.”

“The United States has some of the strongest toy standards and lowest lead limits in the world, specifically to keep children safe,” said CPSC Chairman Kaye. “We have no more important mission than protecting children. For that reason, the CPSC will continue to work with our federal partners to enforce toy safety requirements at the ports and in the marketplace.”

“The defendants in this case endangered thousands of American children by manufacturing for sale counterfeit toys made with unsafe amounts of lead and other hazardous chemicals,” said Special Agent in Charge Hayes Jr. “HSI focuses its efforts to protect intellectual property, first and foremost, on those counterfeit goods that present health and safety hazards to consumers.”

Chenglan Hu, 52, and Hua Fei Zhang, 53, of Bayside, New York, pleaded guilty in connection with importing children’s toys with copyright-infringing images and counterfeit trademarks of popular children’s characters, as well as unsafe lead levels, small parts that presented risks of choking or ingestion, easily-accessible battery compartments, and other potential hazards. Hu and Zhang were the last of nine defendants to plead guilty in this investigation; Guan Jun Zhang, Jun Wu Zhang, and five corporations – Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc. – previously pleaded guilty to Consumer Product Safety Act (CPSA) and trademark counterfeiting charges. In pleading guilty to trafficking in hazardous consumer goods in violation of CPSA, Hu and Zhang also agreed to forfeit $700,000 and more than 120,000 unsafe children’s toys. The government previously seized three luxury vehicles and six bank accounts, and filed lis pendens against two real properties owned by Zhang in Queens, New York.

According to court filings and facts presented at the plea hearings, from July 2005 through January 2013, Hu, Zhang, and the other individual defendants used the companies they owned to import and sell toys from China from a storefront and warehouse in Ridgewood, New York, and other locations in Brooklyn, New York and Queens, New York. According to the indictment, CBP seized toys imported by the defendants from shipping containers entering the United States from China on 33 separate occasions. Seventeen of the 33 seizures contained toys prohibited from import into the United States because of excessive lead content, excessive phthalate levels, small parts that presented risks of choking, aspiration or ingestion, and easily-accessible battery compartments. Sixteen of the 33 seizures contained toys bearing copyright-infringing images and counterfeit trademarks, including a wide variety of popular children’s characters, such as Winnie the Pooh, Dora the Explorer, SpongeBob SquarePants, Betty Boop, Teenage Mutant Ninja Turtles, Power Rangers, Spiderman, Tweety, Mickey Mouse, and Pokémon, as well as those from movies such as “Cars,” “Toy Story” and “High School Musical.”

Hu, Zhang, and the other individual defendants changed their use of the companies, sometimes even forming new companies, and alternated their formal titles in order to conceal their continued importation and distribution of the hazardous and counterfeit toys.

Hu and Zhang pleaded guilty before U.S. Magistrate Judge James Orenstein of the Eastern District of New York. Sentencing will be announced at a later date.

The case was jointly investigated by the HSI Intellectual Property Rights Group and the NYPD, through its participation in the New York Border Enforcement Security Task Force, with the assistance of CBP and CPSC. The case was prosecuted by Senior Counsel Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys William Campos and Claire Kedeshian of the Eastern District of New York.

CONTRACTOR AGREES TO RESOLVE ALLEGATIONS OF IMPROPER LOBBYING

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 3, 2013
Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper Lobbying

The Justice Department announced today that Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE’s Hanford Nuclear Site in eastern Washington. Fluor’s parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction and personnel services for commercial and government customers.

Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used DOE funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.

"The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. "This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation."

"The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds," said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. "We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars."

The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government’s settlement.

This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy’s Office of Inspector General.

The False Claims Act suit was filed in the U.S. District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. cv-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.

NATIONAL BIOSURVEILLANCE STRATEGY

FROM: U.S. DEPARTMENT OF DEFENSE
DOD Partners with Cities, Countries on Biosurveillance
By Cheryl Pellerin
American Forces Press Service

WASHINGTON, Aug. 31, 2012 - In line with the first National Biosurveillance Strategy released last month, the Defense Department is working with U.S. cities and countries around the world to enhance capabilities needed to detect and track a range of natural or intentional global disease outbreaks.

Biosurveillance involves using experts and a range of technologies to systematically gather, analyze and interpret data related to disease activity and threats to human and animal health for early warning and detection.

Though the strategy is new, a range of national policy documents has addressed biosurveillance, beginning in 2007 with Homeland Security Presidential Directive 21. The directive defined biosurveillance and discussed the need for a national capability.

In 2009, objectives stated in the National Strategy for Countering Biological Attacks sought to protect against the misuse of the life sciences to support biological weapons proliferation and terrorism. And the National Security Strategy of 2010 noted the ability of emerging infectious diseases to cross borders and threaten national security.

"DOD's involvement in biosurveillance goes back probably before DOD to the Revolutionary War," Andrew C. Weber, assistant secretary of defense for nuclear, chemical and biological defense programs, told American Forces Press Service.

"We didn't call it biosurveillance then, but monitoring and understanding infectious disease has always been our priority, because for much of our history, we've been a global force," he added.

Today, as part of its effort to prepare for microbial storms unleashed by nature and by adversaries, DOD works internationally and domestically to improve global biosurveillance cooperation, Weber said.

"While we worry a lot about nonstate actors launching a bioterrorist attack," he added, "we also have to worry about rogue states like [North] Korea, Iran and Syria that have biological/chemical weapons programs."

To enhance biodefense capabilities on the Korean peninsula, Weber said DOD and South Korea launched the Able Response exercise in May 2011 and ran it again in May 2012.

"This is a whole-of-government to whole-of-government tabletop exercise focused on a biological incident, not during a conventional war but some type of a covert release, ... that could have a major impact on the civilian population ... but also on our 28,000 forces deployed on the peninsula," the assistant secretary said.

At the Defense Threat Reduction Agency, Ryan Madden is a science and technology manager in the chemical and biological technologies directorate's physical science and technology division. Since 2007, DTRA, the Department of Homeland Security and other federal agencies have worked with the cities of Seattle and Denver, and now are working along with the State Department and with Poland on biosurveillance exercises, Madden told American Forces Press Service.

The first exercise, called the Interagency Biological Restoration Demonstration, or IBRD, ran from 2007 to 2010 in Seattle, he said, calling the demonstration "a very unique partnership" between DOD and Homeland Security.

The exercise was prompted by anthrax attacks that killed five people in the United States in 2001, Madden said.

The scenario involved a large biological anthrax release in a large city. The objective, he explained, was to get "from the baseline of more than 10 years for restoration [of the city after the attack] to a manageable number [of months or years for anthrax cleanup] that allows the city to maintain some form of viability."

IBRD was conducted in partnership with the Seattle King County Urban Area Security Initiative, Madden said, "and at the end of the program, we had a number of toolsets for decision support or efficacy."

The IBRD team had done studies on the efficacy of various solutions on bacillus anthracis -- the bacterium that causes anthrax -- on various surfaces, Madden said. "So there was technical data and decision toolsets that help you use that data to inform sampling approaches or decontamination strategies," he added.

As a result of the exercise, he said, "the [Seattle Urban Area Security Initiative], and their partnership with Joint Base Lewis-McChord as a key military installation there, have a regional consequence management plan that addresses catastrophic biological incidents."

For a large city like Seattle, the community resilience factor -- based on how long leases and businesses can stay viable if people can't get to work -- is about six months. "And we're still not at six months," Madden said.

Last year, Homeland Security took the lead, working with DOD, the Environmental Protection Agency and the Department of Health and Human Services in a follow-on effort in Denver, Madden said, working with the Denver Urban Area Security Initiative.

The Denver recovery and resilience program, which wraps up this year, "expanded on IBRD with anthrax, but added a blister agent and a radiological dispersion device, and it still focuses on physical contamination [and cleanup]," the science and technology manager said.

During the Denver program, Madden added, "we started looking at how this could apply in working with a partner nation."

The international effort began in October as a partnership among DOD, the State Department, Homeland Security and Poland.

"I think [it] ties very closely with both the National Strategy for Countering Biological Threats as well as the National Strategy for Biosurveillance," Madden said, both of which recommend leveraging international collaboration.

Between October 2011 and September 2014, the exercise will use the release of two agents -- one contagion and one environmentally persistent biothreat -- to develop and demonstrate a capability for resilience in countering a threat that affects U.S. and Polish civilians and military personnel and key infrastructure, Madden said.

"[The international effort] is a capability integration and demonstration program, so we're looking at technical feasibility and then operational utility," he added. "We're working so the U.S. European Command, and warfighters are part of it. And later in the program, [we'll have] field demonstrations and utility assessments."

The first technical demonstration will be held in August 2013, he said, and the second in the early spring of 2014.

The final operational demonstration, involving the 773rd Civil Support Team in Germany, Eucom assets and Polish officials working together, will be in September 2014, Madden said. In the meantime, he added, "we're funding Sandia National Laboratory to help with a methodology and a toolset we call Threat Probability to Action. The big gap we're trying to bridge is between earlier warning and rapid response.

"The quicker you're warned about something and the quicker you can make decisions about what to do," he said, "all of that has an impact on [saving lives]."