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A Las Vegas importer and two Chinese companies are indicted after thousands of dogs and cats died or became sick last year.

By Abigail Goldman, Los Angeles Times Staff Writer
February 7, 2008
A Las Vegas food import company, two Chinese businesses and the companies' top executives were indicted Wednesday by a federal grand jury in connection with their parts in a tainted-pet food scandal last year that sickened or killed thousands of dogs and cats, the Justice Department said.

The announcement by John F. Wood, U.S. attorney for the Western District of Missouri, marks the first time that a domestic company has faced criminal charges because melamine -- a chemical found in plastics that can cause kidney failure in animals -- was added to shipments of wheat gluten, a binding agent used in pet foods.

The pet food contamination crisis, which prompted the recall of more than 60 million containers of dog and cat food, was the first in a wave of product scares that alarmed the American public about the quality of goods made in China.

Melamine can artificially inflate the apparent protein content of food additives, allowing exporters to use cheaper ingredients, the indictment said.

"In today's global economy, crimes that occur halfway around the world can seriously impact our lives," Wood said. "Millions of pet owners remember the anxiety of last year's pet food recall. These indictments are the product of an investigation that began in the wake of that recall."

ChemNutra Inc., which imports Chinese food and ingredients for distribution across the United States, along with married owners Sally Qing Miller, 41, and Stephen S. Miller, 55, were charged in a 27-count indictment with evading mandatory inspections of the ingredients in China, delivering adulterated food, misbranding food and conspiring to defraud the companies that unknowingly bought the tainted ingredient. All but the conspiracy count are misdemeanors.

"ChemNutra and Steve and Sally Miller deny in the strongest of terms the allegations by the Department of Justice and look forward to the opportunity to prove their innocence at trial," the company said in a statement. "Neither Mr. nor Mrs. Miller had any intent to defraud or any knowledge of wrongdoing."

Wood said the felony count against ChemNutra and the Millers alleged that they knew the Chinese exporters had put an incorrect product code on the exports -- allowing the shipment to leave China without the normal inspections of food -- and didn't disclose that fact to their customers.

"We don't allege that they knew that the wheat gluten was adulterated with the melamine," Wood said in an interview. "But to convict, we don't have to show that they knew. . . . You are responsible for the content of the food ingredients that you're selling and therefore can be charged with the misdemeanor if you distribute adulterated or misbranded food, regardless of whether you knew if it was adulterated or misbranded."

In a separate case, the grand jury returned a 26-count felony indictment against two Chinese companies and their top executives, accusing them of intent to defraud and mislead, delivering adulterated foods and falsely labeling wheat gluten to avoid export inspection.

Those charges name Xuzhou Anying Biologic Technology Development Co., a Chinese processor of plant proteins; Chinese owner Mao Linzhun, age unknown, whose name is spelled Mao Lijun in Chinese records; Suzhou Textiles, Silk, Light Industrial Products, Arts & Crafts I/E Co., a Chinese export company; and its president, Chen Zhenhao, 58, a Chinese national.

If convicted on all counts, the Chinese nationals could face a maximum of 78 years in prison. The two Americans could face as much as 31 years each behind bars -- five years for the felony and one year for each misdemeanor charge.

Although the United States does not have an extradition treaty with China, Wood said the Justice Department would seek arrest warrants for Mao and Chen that could be enforced should either man travel outside China. The indictment also could prevent the companies from doing business with U.S. companies, Wood said.

The Chinese government shut down Xuzhou Anying last year and arrested Mao. Prior to his arrest, Mao said in an interview that he had done nothing wrong. Wood said it was unclear if Mao was still in custody.

Suzhou Textiles reportedly has denied involvement in the case, and there is no indication that its company has been shut down or anybody arrested. Businesses are closed for the Chinese new year holiday this week, and no one answered the phone Wednesday at Suzhou Textiles' office in Suzhou, an hour's drive from Shanghai.

For some pet owners, many of whom were radicalized by the scandal as they grieved for sick and dying animals or worried that pets could succumb to the toxins, the indictments came as a surprise.

"I didn't think anyone in government thought it was all that serious because it was 'just pets,' " said Christie Keith, a contributing editor for PetConnection.com, which last year became a clearinghouse for information about the tainted food as well as a site that thousands of pet owners turned to for moral support.

"Whether it satisfies me or not depends on what happens," Keith added.

"If the penalties end up being big enough or even if the process is onerous enough that it can have a deterrent effect on companies both here and overseas, then it might have a positive impact."

The problems with pet food began last March, when Menu Foods Income Fund of Ontario, Canada, launched a massive recall after receiving reports of sick and dying animals.

More than 150 brands and more than 5,000 products were hit by the recalls. Millions of chickens, 56,000 swine and an undetermined number of fish may have eaten tainted feed.

Wood said the investigation into the tainted ingredients is ongoing, meaning that other charges could follow.

abigail.goldman@latimes.com Times staff writer Don Lee in Shanghai