3 Companies Indicted in Pet Food Case
AP Business Writer
Two Chinese businesses and a U.S. company were indicted Wednesday in the tainted pet food incidents that killed potentially thousands of animals last year and raised worries about products made in China.
Xuzhou Anying Biologic Technology Development Co.; Suzhou Textiles, Silk, Light Industrial Products Arts and Crafts I/E Co.; and Las Vegas-based ChemNutra Inc. were charged in two separate but related indictments.
The U.S. attorney's office in Kansas City said the U.S. Food and Drug Administration has received consumer reports suggesting 1,950 cats and 2,200 dogs died after eating food contaminated with the toxic chemical melamine.
U.S. Attorney John F. Wood said authorities haven't been able to substantiate all those reports, but "as for pet deaths, we think it's in the thousands."
One of the indictments charges Xuzhou Anying Biologic, located in China's Jiangsu Province, and Suzhou Textiles, in Suzhou, China, with 13 felony counts of introduction of adulterated food into interstate commerce and 13 felony counts of introduction of misbranded food into interstate commerce.
The indictment also names Mao Linzhun, Xuzhou's owner, and Zhen Hao Chen, Suzhou's president.
ChemNutra and company owners Sally Quing Miller, a Chinese national, and her husband, Stephen S. Miller, were charged with 13 misdemeanor counts of introduction of adulterated food into interstate commerce, 13 misdemeanor counts of introduction of misbranded food into interstate commerce and one felony count of conspiracy to commit wire fraud.
Each of the felony counts against the Chinese defendants is punishable by up to three years in prison, according to the indictment. The misdemeanor charges against ChemNutra and its owners are each punishable by up to a year in prison, while the felony conspiracy count carries a maximum sentence of five years.
The indictments allege that Suzhou Textiles, an export broker, mislabeled 800 metric tons of tainted wheat gluten manufactured by Xuzhou to avoid inspection in China. Suzhou then did not properly declare the contaminated product it shipped to the U.S. as a material to be used in food, the indictment says.
It also says the shipment was falsely declared to the Chinese government in a way that would avoid a mandatory inspection of the company's plants.
"The defendants intended to deceive the Chinese government in addition to consumers," Wood said.
According to the indictment, ChemNutra picked up the melamine-tainted product at a port of entry in Kansas City, then sold it to makers of various brands of pet foods. The indictment alleges that Xuzhou added the melamine to artificially boost the protein content of the gluten to meet the requirements specified in Suzhou's contract with ChemNutra.
Wood said adding the melamine, which would allow it to pass chemical inspections for protein content, was cheaper than actually adding protein to the gluten.
He added that prosecutors aren't alleging that the Millers and ChemNutra knew that the product was toxic, only that they were aware the product had been shipped into the U.S. under false pretenses and failed to notify their customers.
"Millions of pet owners remember the anxiety of last year's pet food recall. These indictments are the product of an investigation that began in the wake of that recall," Wood said.
Steve Stern, a spokesman for ChemNutra, said the Millers "deny the allegations by the Justice Department in the strongest of terms and look forward to the opportunity to prove their innocence at trial. Neither Mr. nor Mrs. Miller had any intent to defraud or knowledge of any wrongdoing."
Wood said the Chinese government is cooperating with the investigation and shut down Xuzhou shortly after its connection to the melamine scare was discovered last year.
In addition, Chinese officials signed an agreement in December increasing inspections on a number of products, including pet food ingredients, Wood said.
"Since this issue came to light, steps have been taken to protect consumer safety," Wood said.
He added that Chinese authorities took Linzhun into custody at the time his company was shut down, but he said he didn't know if Linzhun was still in custody.
The U.S. doesn't have an extradition treaty with China, meaning there's no legal way to force China to hand over Linzhun or Chen, Wood said. But federal authorities have alerted Interpol and other law enforcement agencies to be on the lookout for them if they leave China.
Copyright © 2008 The Seattle Times Company
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook