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U.S. Department of Health and Human Services

Animal & Veterinary

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Several Firms, Corporate Executives Indicted in Adulterated Pet Food Case

by Walt D. Osborne, M.S., J.D., Assistant Editor
FDA Veterinarian Newsletter January / February 2008 Volume XXIII, No I

Two Chinese nationals and the businesses they operate, along with a U.S. company and its president and chief executive officer, were indicted on February 6, 2008, by a Federal grand jury in separate but related cases. The indictments follow an investigation by the Food and Drug Administration’s Office of Criminal Investigations and are based on the roles the firms and the individuals played in a scheme to import products purported to be wheat gluten into the United States that were contaminated with melamine and related compounds, cyanuric acid, ammeline, and ammelide, the combination of which can cause kidney failure in animals.

The melamine-contaminated products are potentially associated with many illnesses and deaths of dogs and cats last year.

Wheat gluten is extracted from wheat and dried to yield a powder of high protein content. Pet food manufacturers use wheat gluten as a binding agent in the manufacture of certain types of pet food to thicken pet food “gravy.”

The criminal indictments were filed by the U.S. Attorney’s Office in Kansas City, MO, because the port of entry for the purported wheat gluten into the United States was a Kansas City warehouse. The indictments allege that more than 800 tons of purported wheat gluten, valued at nearly $850,000, was imported into the United States between November 6, 2006, and February 21, 2007. Melamine can artificially inflate the crude protein content of food additives, allowing export-ers to pass ingredients of cheaper quality and price as more expensive ingredients, according to the indictment. Melamine and its related compounds have no approved use as ingredients in human or animal food in the United States.

Beginning in March 2007, pet food manufacturers recalled more than 150 brands of dog and cat foods after reports that animals had suffered kidney failure. Consumers and veterinarians have since reported many more illnesses and deaths potentially associated with these pet foods.

Multi-count indictments

One of the indictments charges the following Chinese firms and individuals with 26 felony counts:

  • Xuzhou Anying Biologic Technology Development Co., LTD. (XAC), a Chinese firm that processes and exports plant proteins to the United States;
  • Mao Linzhun, a Chinese national who is the owner and manager of XAC;
  • Suzhou Textiles, Silk, Light Industrial Products, Arts and Crafts I/E Co. LTD. (SSC), a Chinese export broker that ex-ports products from China to the United States; and
  • Chen Zhen Hao, president of SSC and a Chinese national.

The indictment alleges that these Chinese firms and individuals, with the intent to defraud and mislead, delivered adul-terated and misbranded food into interstate commerce.

Also indicted were ChemNutra, Inc., a Las Vegas, NV, corporation that buys food and food components from China to sell to U.S. companies in the food industry, along with ChemNutra owners Sally Qing Miller and her husband, Stephen S. Miller, who were charged in a separate, but related, 27-count indictment, listing 26 misdemeanor charges and 1 felony conspiracy charge. Sally Qing Miller, a Chinese national, is the controlling owner and president of ChemNutra; Stephen Miller is an owner and CEO of ChemNutra.

Both indictments charge all seven defendants with, among other things, causing the delivery of adulterated food that contained melamine, a substance which may render the food injurious to health, into interstate commerce and with caus-ing the introduction of misbranded food into interstate commerce. ChemNutra and the Millers have also been charged with conspiring to defraud the companies that bought the purported wheat gluten.

ChemNutra contracted with SSC, a Chinese registered export broker, to purchase food grade wheat gluten, according to the indictment. SSC then entered into a separate contract with XAC to supply the wheat gluten it needed to fulfill its contract with ChemNutra.

Prison Terms and Fines May Be Imposed

The potential penalties differ, based on the charges and whether the defendant is a corporation or an individual. The misdemeanor counts faced by ChemNutra carry a fine of up to $200,000 per count, while the misdemeanor counts faced by the Millers carry fines of up to $100,000 and prison sentences of up to 1 year per count. The one felony count faced by ChemNutra and the Millers carries a fine of up to $500,000 for the corporation and fines of up to $250,000 and prison sen-tences of up to 5 years for the individuals. For the 26 felony counts faced by the Chinese corporations and individuals, the corporations face fines of up to $500,000 per count, and the individuals face fines of up to $250,000 and prison sentences of up to 3 years per count.