Yesterday, federal prosecutors secured first-of-their-kind criminal guilty verdicts against senior executives for conspiracy and failure to report critical safety information to the United States Consumer Product Safety Commission (CPSC).  These verdicts serve as a reminder that CPSC and its federal partners will use all available tools to keep consumers safe.  The defendants, Simon Chu and Charley Loh, were the chief administrative officer and chief executive officer, respectively, of Gree USA, Inc., a subsidiary of the Chinese-owned Hong Kong Gree Electric Appliances Sales Co., Ltd.  Specifically, Chu and Loh deliberately withheld information about defective dehumidifiers that could catch fire and sold these units with false certification marks that the products met applicable safety standards. 

Under the Consumer Product Safety Act (CPSA), firms are required to report information about potential product hazards to CPSC.  When firms knowingly fail to do so, the agency is authorized to pursue civil penalties.  If the conduct is willful, the CPSA prescribes penalties for criminal violations against not only the firm itself, but also individual directors, officers, and corporate agents.  

CPSC and Department of Justice (DOJ) staff have pursued this case for years, beginning before the tenure of all current Commissioners.  In March 2016, CPSC approved a settlement agreement that included a $15.45 million civil penalty to resolve allegations of numerous CPSA violations.  In October 2021, Gree pled guilty to related felony charges.  I would like to thank all involved in this case for their work, including our dedicated staff and the Consumer Protection Branch of DOJ’s Civil Division.