E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
Two corporate executives have been sentenced to federal prison for failing to report defective dehumidifiers linked to over 450 fires. This marks the first criminal enforcement action under the Consumer Product Safety Act 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 provide information as mandated by the CPSA.
Assistant Attorney General Brett Shumate stated that "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 pursuing those who evade these requirements.
United States Attorney Bill Essayli commented on the accountability of corporate executives who ignore legal obligations: “Corporate executives who choose to ignore the law will be held accountable – especially when death and serious injuries result.”
Peter Feldman, CPSC Acting Chairman, highlighted the risks posed by these Chinese-made products: “These Chinese-made products were hazardous, and the defendants knew it.” He praised both CPSC and Justice Department teams for their efforts in securing this outcome.
The defective dehumidifiers sold by Chu’s and Loh’s corporations were part of multiple recalls involving Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. These recalls noted over 450 reported fires linked to Gree Zhuhai dehumidifiers.
Chu was part owner and chief administrative officer of Gree USA Inc., while Loh served as CEO. They continued selling these dehumidifiers despite knowing about their defects and hazards. By September 2012, they had received reports indicating that their products could catch fire but failed to inform CPSC immediately.
In April 2023, Gree USA was sentenced to pay a $500,000 criminal fine after pleading guilty for not notifying CPSC about issues with the dehumidifiers. This was part of a $91 million resolution involving Gree USA, Gree Zhuhai, and Hong Kong Gree Electric Appliances Sales Co. Ltd.
The investigation was conducted by Homeland Security Investigations. 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.
