Jury Convicts Gree USA Leaders for Withholding Critical Safety Information on Faulty Dehumidifiers Linked to Nationwide House Fires
In a landmark legal case, two high-ranking officials from Gree USA Inc., a subsidiary of Chinese manufacturing giant Gree Electric Appliances Inc. of Zhuhai, have been convicted by a California jury. The convictions pertain to their failure to disclose crucial information about hazardous defects in residential dehumidifiers, which have been linked to numerous house fires across the United States. This significant legal development marks the first instance of corporate criminal enforcement under the Consumer Product Safety Act, overseen by the U.S. attorney’s office for the Central District of California.
The issue centers around a series of residential dehumidifiers that, despite being widely sold under prominent brand names such as Frigidaire, GE, Kenmore, and available at major retailers including Home Depot, Menards, Walmart, and Lowes, were discovered to be fundamentally flawed. These appliances, which have caused over 450 reported fires and resulted in substantial monetary damages, were produced by Gree Electric Appliances and distributed by Gree USA. Despite the severity of the situation, the top executives of Gree USA, Simon Chu and Charley Loh, failed to inform the U.S. Consumer Product Safety Commission (CPSC) about these defects in a timely manner, even as their company continued to market and sell the defective products.
The gravity of their omission became apparent when Chu, 68, and Loh, 65, were found guilty of conspiracy to defraud the CPSC and failing to furnish legally required information. While they were acquitted of wire fraud, the convictions still carry a significant penalty, with both executives potentially facing up to five years in federal prison for each count. The sentencing hearing is scheduled for March 11 before U.S. District Judge Dale S. Fischer.
In addition to the individual convictions, Gree USA has been ordered to pay a $500,000 criminal fine after pleading guilty to its failure in notifying the CPSC. This fine is part of a larger $91 million settlement that includes restitution to victims, involving Gree Electric, Gree USA, and Hong Kong Gree Electric Appliances Sales Co. Ltd. Meanwhile, CPSC Chair Alex Hoehn-Saric has emphasized that these verdicts should serve as a stern warning to all companies about the importance of adhering to consumer product safety regulations.
The CPSC has taken further action by announcing a new recall of dangerous dehumidifiers manufactured by Gree, in addition to reissuing a previous recall. This decision came in the wake of reports that four individuals in Ohio, Iowa, and Missouri tragically lost their lives in house fires linked to these faulty dehumidifiers. Consumer advocates have expressed concerns that many of these defective appliances might still be in use in homes and basements, posing a continuing risk to the public.
For homeowners concerned about the safety of their dehumidifiers, the CPSC recommends checking their appliances against the information available on CPSC.gov or greedehumidifierrecall.com. This case highlights the critical need for corporate responsibility and the severe consequences of negligence in ensuring product safety.
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