(Image Credit: IMAGN)
Los Angeles, California – Two Southern California corporate executives were sentenced to federal prison on Monday in what the Justice Department called a landmark criminal enforcement under the Consumer Product Safety Act. The convictions mark the first time corporate officers have been held criminally responsible for failing to report dangerous consumer products.
Simon Chu, 70, of Pomona, and Charley Loh, 67, of Arcadia, received prison terms of 38 and 40 months, respectively, after a jury found them guilty in November of conspiring to defraud the U.S. government and failing to disclose life-threatening product defects. In addition to prison time, Chu was fined $5,000 and Loh $12,000.
At the heart of the case were defective dehumidifiers imported from China and sold under their leadership at Gree USA Inc. and another affiliated corporation based in the City of Industry. The dehumidifiers, manufactured by Gree Electric Appliances Inc. of Zhuhai, China, were implicated in more than 450 fires and millions of dollars in property damage. The Consumer Product Safety Commission (CPSC) has issued multiple recall announcements in connection with the units.
Federal prosecutors argued that Chu and Loh ignored a clear legal obligation to report mounting evidence that the dehumidifiers posed an unacceptable risk to the public. By September 2012, they had received test data and consumer complaints indicating their products were defective and capable of catching fire. But instead of alerting regulators “immediately,” as required under the CPSA, the two continued selling the units for six more months.
Their failure to report the defects, prosecutors contended, prioritized profit over public safety. “Corporate executives who choose to ignore the law will be held accountable—especially when death and serious injuries result,” said U.S. Attorney Bill Essayli. Officials with the CPSC emphasized that both men had knowingly violated the law and endangered American families by concealing the hazards of the Chinese-made products.
Although the jury acquitted Chu and Loh of wire fraud, their conviction on the conspiracy and failure-to-report charges stands as a signal of expanded federal willingness to prosecute corporate actors in consumer safety cases—an area where criminal enforcement has historically been rare.
Gree USA, along with its parent companies in China and Hong Kong, reached a $91 million criminal resolution with the U.S. government in April 2023. That deal included a $500,000 criminal fine against Gree USA and restitution payments to victims impacted by the defective dehumidifiers.
