By SDCN Staff
Two California businessmen were sentenced in Los Angeles on June 16 for conspiracy and failing to report information related to defective dehumidifiers linked to multiple residential fires, federal prosecutors said.
U.S. District Court Judge Dale S. Fischer sentenced Simon Chu, 70, of Pomona, California, and Charley Loh, 67, of Arcadia, California, to serve 38 and 40 months in prison respectively, plus three years of supervised release, for their roles in a conspiracy to defraud the U.S. Consumer Product Safety Commission (CPSC) and in failing to furnish information as required by the Consumer Product Safety Act (CPSA). The Court also ordered Chu and Loh to pay fines of $5,000 and $12,000, respectively, as part of their sentences. Chu and Loh were convicted on November 16, 2023, following a trial in Los Angeles.
According to court documents and evidence presented in court, Loh was part owner and chief executive officer of Gree USA Inc., and another corporation in City of Industry, California, both of which imported and sold residential dehumidifiers that were made in China by Gree Electric Appliances, Inc. of Zhuhai (Gree Zhuhai). Chu was part-owner and chief administrative officer of the same two corporations.
The CPSA requires manufacturers, importers, and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death. This duty also applies to the individual directors, officers, and agents of those companies. According to evidence presented in court, by September 2012, Chu, Loh, and their companies had received multiple reports that their Chinese dehumidifiers were defective, dangerous, and could catch fire. They also knew that they were required to report this product safety information to the CPSC immediately. Despite knowing about dehumidifier fires and tests showing defects in the dehumidifiers, Chu and Loh failed to disclose defects and hazards for at least six months while they continued to sell their products.
“Federal law requires companies to report potentially dangerous products to the Consumer Product Safety Commission to help protect consumers from harm,” said Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division. “The Justice Department will continue to investigate and bring to justice companies and individuals who willfully evade these requirements and put the public in danger.”
The defective dehumidifiers sold by Chu and Loh’s two corporations were included in multiple recalls of a larger number of defective dehumidifiers manufactured by Gree Zhuhai. According to the recall notices, more than 450 reported fires and millions of dollars in property damage were linked to the recalled Gree dehumidifiers.
