First-ever CPSIA Lawsuit Filed Against Five Corporations Importing Hazardous Toys
The U.S. Department of Justice this week unsealed an indictment against five corporations and five individuals charged with importing hazardous and counterfeit toys from China for sale in the United States. The case, United States v. Hu, was filed in February and marks the first time charges were brought against a defendant for violating the Consumer Product Safety and Improvement Act of 2008 (CPSIA).
The 24-count indictment charges Chenglan Hu, Hua Fei Zhang, Xiu Lan Zhang Guan Jun Zhang and Jun Wu Zhang, all of Queens, N.Y., of violating CPSIA as well as other federal regulations. The case also charges the companies held by these individuals, Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc., of importing and trafficking hazardous children's toys, smuggling, money laundering and structuring. None of the companies are listed or registered with any U.S. promotional products organizations, although they are accused of selling in both retail and wholesale markets.
"For years, the defendants sought to enrich themselves by importing and selling dangerous and counterfeit children's toys without regard for the law or the health of our children," said U.S. attorney Loretta Lynch. "Profits from the counterfeit items, as well as toys riddled with lead and choking hazards, went to provide the defendants with luxury cars. We stand committed to protecting the residents of our communities from those who would engage in such conduct."
Between July 2005 and January 2013, the defendants' companies had 33 shipping containers from China seized by Customs and Border Protection. Of those seizures, 17 included products that violated CPSIA due to excessive lead content, excessive phthalate levels, small parts that presented choking hazards, and easily accessible battery compartments. The other 16 containers included toys violating copyright regulations, including counterfeit toys of Dora the Explorer and Spiderman. The DOJ states that the defendants would switch between the five companies each time they were served written notice of a violation.