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First Criminal Complaint Filed For CPSIA Violations


The U.S. Department of Justice has indicted five individuals and five companies for allegedly importing hazardous and counterfeit toys from China. The indictment, initially filed in February, is the first criminal case alleging violations of the Consumer Product Safety Improvement Act of 2008 (CPSIA). The case charges that five Chinese nationals and residents of Queens, NY, along with their non-industry nor ASI-listed corporate entities (Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc.) imported and sold hazardous toys in violation of the CPSIA. The charges also include copyright infringements, as many of the toys bear logos, trademarks or images that they weren't legally allowed to use.

"The defendants are accused of importing and selling toys that posed significant health hazards to children or were the product of blatant intellectual property theft," said Lanny Breuer, assistant attorney general of the Justice Department's Criminal Division. "They allegedly retooled their operations many times in order to avoid detection, and despite repeated citations by the authorities, they continued to peddle counterfeit toys featuring Dora the Explorer, SpongeBob SquarePants and other popular children's characters. Today's actions reflect a Justice Department focused on ensuring that consumers receive safe and legitimate goods."

The indictment charges that from July 2005 through January 2013 the defendants used their companies to import toys from China that they sold through both wholesale and retail channels. According to the indictment, the defendants' companies had children's toys seized from shipping containers entering the United States from China on 33 separate occasions. Seventeen of the 33 seizures were of toys that contained excessive lead content, excessive phthalate levels, or small parts that presented hazards.

"The people and companies involved in this illegal trade not only allegedly infringed on intellectual property rights, they placed the lives of innocent children in danger," said James Hayes Jr., special agent in charge of Homeland Security Investigations (HSI) in New York. "They allegedly sold toys with high lead content and cheap knock offs with substandard parts that break easily and pose a choking hazard. HSI is firm on using its customs expertise and law enforcement partnerships to put an end to the importation and sale of dangerous goods."

The case will be prosecuted and tried in U.S. District Court for the Eastern District of New York.

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