On Monday, the Atlanta Journal-Constitution reported the indictment of two executives of a Lawrenceville company on federal charges of conspiracy to evade U.S. “anti-dumping” duties on paper produced in China and bribery of foreign officials. The company, Apego Inc., is a major supplier of lined notebook paper for schools. Federal prosecutors allege that executives of the company conspired to evade certain taxes on paper products that were produced in China, falsified customs documents, and bribed Taiwanese customs officials. So far one Apego executive has plead not guilty and another remains in Taiwan due to illness, but is expected to return to the U.S. to face the charges.
When the U.S. government determines that a foreign product is being sold in the U.S. at below-market low prices—often due to support from foreign governments in an attempt to manipulate the market for the product—it imposes sizeable duties on those products. Since 2006 the government has cracked down on Chinese “dumping,” and it now adds a nearly 77% duty to Chinese paper products in an effort to correct unfair pricing that might otherwise drive domestic paper producers out of business. But while Chinese products are subject to this duty, Taiwanese paper products are not.
According to the government, executives from Apego arranged to have paper from China mislabeled as originating in Taiwan in order to evade the large tax. The government alleges that the company did this at first by hiring Taiwanese workers to re-label Chinese packages and then later, in 2007, bribes Taiwanese officials to aid in the scheme.
In this case, the U.S. government supposedly became aware of Apego because a former employee and former-lover of one of the company’s executives stole a hard drive from the company and delivered it to the Department of Homeland Security. It will be interesting to see if this fact complicates the government’s criminal cases against the Apego executives and three other recently indicted Chinese and Taiwanese businesspeople. A vengeful ex-lover is not typically the best way for a prosecutor to obtain valuable evidence.
Our federal defense attorneys have extensive experience protecting clients facing complex criminal charges including fraud, conspiracy, and racketeering. We have represented clients in a number of international criminal matters and have an impressive record of success.
