A California jury found two residential dehumidifier company executives guilty of criminal charges, the Chicago Sun-Times reports. The companies made and sold defective humidifiers that were implicated in hundreds of house fires nationwide. The two executives will face prison time in the first-ever corporate criminal enforcement action under the Consumer Product Safety Act. The dehumidifiers, which wound up being the subject of numerous recalls, caused more than 450 fires and millions of dollars of damages have been reported. The products were made by the Chinese firm Gree Electric Appliances Inc. of Zhuhai and distributed by its subsidiary Gree USA Inc. Consumer Product Safety Commission Chair Alex Hoehn-Saric said the verdicts “should serve as a warning to companies that CPSC and its Federal partners will continue to aggressively pursue those who fail to take consumer product safety seriously.”
Gree USA Chief Administrative Officer Simon Chu, 68, of Chino Hills, and Gree CEO Charley Loh, 65, of Arcadia, were found guilty last week of one count of conspiracy to defraud the Consumer Product Safety Commission and one count of failure to furnish information as required by law. The jury acquitted the executives of one count of wire fraud. Prosecutors argued that Loh, Chu and their companies had received multiple reports as early as September 2012 that their dehumidifiers were defective, dangerous and could catch fire. Despite receiving consumer complaints and test results showing the defects, they failed to tell the CPSC about it for at least six months while they kept selling the problem appliances, the government said. A sentencing hearing is set for March 11 before U.S. District Judge Dale Fischer. Consumer advocates worry that the defective dehumidifiers are still widely used in people’s homes and basements.