Two corporate executives have been sentenced to federal prison for their roles in failing to report defective dehumidifiers linked to over 450 fires. This marks the first criminal enforcement action against corporate executives under the Consumer Product Safety Act (CPSA).
Simon Chu, aged 70 from Pomona, received a 38-month prison sentence and a $5,000 fine. Charley Loh, aged 67 from Arcadia, was sentenced to 40 months 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 required information under the CPSA.
Assistant Attorney General Brett Shumate 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 would continue pursuing individuals who evade these requirements.
United States Attorney Bill Essayli remarked on holding corporate executives accountable when ignoring laws results in death or serious injuries. “By putting profits over the safety of others, these defendants created serious risks to consumers,” he said.
Peter Feldman, Acting Chairman of CPSC, highlighted that “these Chinese-made products were hazardous,” acknowledging today’s sentences as a clear message against breaking American laws.
The defective dehumidifiers distributed by Chu’s and Loh’s corporations were part of multiple recalls involving Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. The recalls noted more than 450 reported fires and significant property damage linked to these products.
Chu served as part owner and chief administrative officer of Gree USA Inc., while Loh was part owner and CEO. Their companies received reports by September 2012 about the dehumidifiers’ defects but failed to report this information for at least six months while continuing sales.
Although acquitted on one count of wire fraud, both faced consequences due to their actions related to product safety reporting failures.
In April 2023, Gree USA was fined $500,000 after pleading guilty for not notifying CPSC about issues with its dehumidifiers. This fine is part of a broader $91 million criminal resolution involving Gree USA and related entities.
Homeland Security Investigations led this case’s investigation with prosecution efforts from Assistant United States Attorney Dennis Mitchell along with Justice Department Trial Attorneys Natalie Sanders, Speare Hodges, Stephen Gripkey supported by Patricia Vieira from CPSC’s Office of General Counsel.
