LOS ANGELES
Two corporate executives were sentenced to federal prison for failing to report fire-prone, defective dehumidifiers, marking the first-ever criminal enforcement under the Consumer Product Safety Act (CPSA).
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Charley Loh, 67, CEO, was sentenced to 40 months in prison and fined $12,000.
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Simon Chu, 70, chief administrative officer, received 38 months and a $5,000 fine.
A jury convicted both men in November 2023 of conspiracy to defraud the U.S. Consumer Product Safety Commission (CPSC) and failing to report product hazards, as required by law.
“Federal law requires companies to report potentially dangerous products to the Consumer Product Safety Commission to help protect consumers from harm,” said Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division.
Loh and Chu ran two U.S.-based companies that sold Chinese-made dehumidifiers manufactured by Gree Electric Appliances of Zhuhai, which were later linked to over 450 fires and millions of dollars in property damage.
Despite receiving test results and fire complaints by September 2012, the pair concealed safety defects for at least six months, continuing to sell the units to retailers.
Under the CPSA, companies — and their executives — must immediately report potential hazards to the CPSC. Both men ignored this legal duty.
“These products were dangerous, and the defendants knew it,” said CPSC Acting Chairman Peter Feldman.
The jury acquitted both on a separate wire fraud charge.
In 2023, Gree USA — which pleaded guilty — was fined $500,000 and agreed to a $91 million resolution, including restitution. Homeland Security Investigations led the probe.