Two Chinese businesses, their executives, a U.S. firm and its owners have been indicted by a federal grand jury in Kansas City for their involvement in the pet food recalls of last year.
ChemNutra Inc. of Las Vegas along with Xuzhou Anying Biologic Technology Development Co., and Suzhou Textiles, Silk, Light Industrial Products, Arts and Crafts I/E Co., were charged under two separate but related indictments.
The indictment alleged that Chinese shipments of wheat gluten tainted with melamine were falsely labeled to avoid inspection.
From Las Vegas Sun:
ChemNutra and company owners Sally Quing Miller, 31, a Chinese national, and her husband, Stephen S. Miller, 55, were charged with 13 counts for introducing adulterated food into interstate commerce, 13 counts of introducing misbranded food into interstate commerce and one count of conspiracy to commit wire fraud.
The other indictments charge the two Chinese companies of 13 counts of introducing adulterated food into interstate commerce and 13 counts of introducing misbranded food into interstate commerce.
“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,” U.S. Attorney John Wood said in a news release announcing the indictments.
UPDATE: Here is some more information on the indictments and comments from ChemNutra from Yahoo News:
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.
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.”
UPDATE #2: Here is more on the indictments from the New York Times:
After news of the tainted wheat gluten emerged last spring, all of the companies charged in the indictment said they did not know how melamine â€” which can be toxic when ingested â€” had made its way into the gluten.
But the owner of Xuzhou Anying, Mao Lijun â€” who is referred to in the indictment as Mao Linzhun â€” subsequently conceded to Chinese authorities that his company had added the melamine to make the wheat gluten appear higher in protein, court papers said. Xuzhou was required by ChemNutra to produce wheat gluten with at least 75 percent protein content.
ChemNutra and its owners, a married couple, Sally Qing Miller and Stephen S. Miller, knew that the shipment was mislabeled in a way that would allow it to leave China without testing, the United States attorneyâ€™s office says, and the Millers did not disclose the mislabeling to pet food makers.
The government cited e-mail messages sent or received by the Millers in 2006 in which the proper codes for wheat gluten and other proteins were discussed.
In addition to accusing the Millers of helping the Chinese companies distribute tainted food, the indictment said the couple defrauded customers, the pet food makers.
As early as January last year, one pet food maker complained to ChemNutra that the wheat gluten was too moist, according to the indictment.
The Millers also misled pet food makers by saying that they had worked directly with Xuzhou Anying without mentioning Suzhou Textiles, the intermediary, the indictment said.
“From April 2006 through April 2007, ChemNutra and the Millers participated in a conspiracy to defraud the companies that purchased XAC-manufactured wheat gluten from them, by concealing material facts from those purchasers,” the indictment said.
And, prosecutors allege, Sally Miller knew the product would not be subjected to mandatory inspection prior to leaving China and did not disclose this to ChemNutra’s customers.