{"id":563,"date":"2011-11-01T14:15:21","date_gmt":"2011-11-01T18:15:21","guid":{"rendered":"http:\/\/www.reefrelieffounders.com\/news\/?p=563"},"modified":"2011-11-01T14:19:33","modified_gmt":"2011-11-01T18:19:33","slug":"justice-dept-u-s-virgin-islands-company-sentenced-for-illegal-trade-of-protected-coral-gem-manufacturing-sentenced-to-highest-financial-penalty-for-illegal-coral-trade","status":"publish","type":"post","link":"https:\/\/www.reefrelieffounders.com\/news\/2011\/11\/01\/justice-dept-u-s-virgin-islands-company-sentenced-for-illegal-trade-of-protected-coral-gem-manufacturing-sentenced-to-highest-financial-penalty-for-illegal-coral-trade\/","title":{"rendered":"Justice Dept: U.S. Virgin Islands Company Sentenced for Illegal Trade of Protected Coral Gem Manufacturing Sentenced to Highest Financial Penalty for Illegal Coral Trade"},"content":{"rendered":"

Congratulations to all who made case this a success! \u00a0Our law enforcement and legal teams are a vital part of any successful reef conservation, for<\/em>\u00a0 without prosecution there would not likely be effective deterrence.\u00a0 Three cheers!! \u00a0hip, hip, hip – hooray!\u00a0\u00a0 “The aggregate financial penalty of $4.47 million makes this the largest for the illegal trade in coral, the largest non-seafood wildlife trafficking financial penalty and the fourth largest for any U.S. case involving the illegal trade of wildlife.”<\/em>\u00a0 per Susan White on Coral-list 11\/1\/11<\/p>\n

Office of Public Affairs:\u00a0 Wednesday, October 26, 2011<\/p>\n

WASHINGTON \u2013 A U.S. Virgin Islands company was sentenced Wednesday in federal court in St. Thomas, U.S.V.I., for knowingly trading in falsely-labeled, protected black coral that was shipped into the United States in violation of the Endangered Species Act and the Lacey Act, the Department of Justice announced.<\/p>\n

On July 15, 2011, GEM Manufacturing LLC, headquartered in St. Thomas, pleaded guilty to seven counts of v iolations of both the Endangered Species Act and the Lacey Act. \u00a0 The Lacey Act makes it a felony to falsely label wildlife that is intended for international commerce. The Endangered Species Act is the U.S. domestic law that implements the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). \u00a0Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.<\/p>\n

GEM was sentenced to pay a criminal fine of $1.8 million. \u00a0 The criminal fine will be apportioned between the Lacey Act Reward Fund and the National Oceanic and Atmospheric Administration (NOAA) Asset Forfeiture Fund, accounts established by Congress to assist U.S. Fish and Wildlife Service (FWS) and NOAA in the enforcement of federal conservation laws. GEM was sentenced to pay an additional $500,000 in community service payments for projects to study and protect black coral.<\/p>\n

GEM was also ordered to forfeit dozens of jewelry items, ten artistic sculptures and over 13,655 pounds of raw black coral, the total value of which, at current prices, exceeds $2.17 million. The aggregate financial penalty of $4.47 million makes this the largest for the illegal trade in coral, the largest non-seafood wildlife trafficking financial penalty and the fourth largest for any U.S. case involving the illegal trade of wildlife.<\/p>\n

\u201cWe face a growing challenge to preserve the world\u2019s coral, which serves as essential habitat for marine biodiversity,\u201d said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. \u201cWe will continue to work with our federal partners to aggressively investigate and prosecute those who violate U.S. law by illegally trading in protected species.\u201d<\/p>\n

\u201cI have stated before and reiterate that the U.S. Attorney’s Office will vigorously protect the environment,\u201d said U.S. Attorney Ronald W. Sharpe for the District of the U.S. Virgin Islands. \u201cIt is critical that we do everything we can to prevent the decline and depletion of coral and other protected flora and fauna so that the environment, in this case the marine environment, may be preserved for our enjoyment and that of future generations.\u201d<\/p>\n

\u201cIllegal trade further threatens already fragile coral reef ecosystems. The penalties here should make it clear that the United States will not tolerate trafficking in these protected resources,\u201d said William C. Woody, Chief, U.S. Fish and Wildlife Service (FWS) Office of Law Enforcement.<\/p>\n

\u201cBlack corals are valuable resources that serve as habitat for a myriad of species in the deep sea,\u201d said Eric Schwaab, assistant NOAA administrator for NOAA’s Fisheries Service. \u201cThey are slow-growing, and some species can live for hundreds to thousands of years. Effective enforcement and regulation of their trade in support of CITES are among our most important tools in ensuring that collection of these species is sustainable and that their survival in the wild is assured.\u201d<\/p>\n

\u201cCBP Officers and Agriculture Specialists in the Caribbean work hand in hand with the U.S. Fish and Wildlife Service to detect and intercept falsely labeled and concealed wildlife from illegally entering into U.S. commerce,\u201d said Marcelino Borges, U.S. Customs & Border Protection (CBP) Director of Field Operations for the Caribbean. \u00a0\u201cCooperation and collaboration between U.S. Customs & Border Protection and U.S. Fish & Wildlife Service were critical in the success of this investigation.\u201d<\/p>\n

\u201cThis sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,\u201d said Roberto Escobar Vargas, special agent in charge of U.S. Immigration and Customs Enforcement\u2019s Homeland Security Investigations (ICE-HSI) in Puerto Rico. \u201cWe will continue to identify and apprehend those who exploit protected species for commercial gain.\u201d<\/p>\n

GEM was sentenced to three and a half years of probation and a 10-point compliance plan that includes an auditing, tracking and inventory control program. \u00a0 GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu. \u00a0 GEM was the entity known as \u201cCompany X\u201d in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands). \u00a0 \u00a0In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas. \u00a0 The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM. \u00a0 On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine. Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.<\/p>\n

Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures, and used in inlaid jewelry. \u00a0 Black coral is typically found in deep waters, and many species have long life spans and are slow-growing. \u00a0 Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones. \u00a0 In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear, and the introduction of invasive species have threatened this group of coral. \u00a0 Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.<\/p>\n

GEM is a manufacturer of high-end jewelry, art, and sculpture items that contain black coral. \u00a0 The vast majority of GEM\u2019s sales are through retail stores called \u201cgalleries.\u201d \u00a0 In order to facilitate its operations, GEM Manufacturing LLC operated through several subsidiaries that did business in Florida, Nevada, California, Hawaii, U.S. Virgin Islands, Alaska and the Cayman Islands.<\/p>\n

Prior to 2010, GEM\u2019s primary supplier of black coral was a Taiwanese company, Peng Chia Enterprise Co., Ltd., located in Taipei, Taiwan. \u00a0 Peng Chia was, at times, able to obtain CITES export permits from the Taiwanese government, but by 2007, the Taiwanese government had increased scrutiny of the trade and insisted on a proper certificate of origin. \u00a0 Because much of the black coral was of, at best, undeterminable, if not legally questionable origin, it was basically impossible to arrange for a legitimate certificate of origin to be issued.<\/p>\n

According to the plea documents, in order to be able to continue to supply GEM with raw black coral, Peng Chia sought other black coral sources in mainland China, routing them through Hong Kong on their way to GEM facilities. \u00a0 None of the shipments from Hong Kong had the required CITES certificates. \u00a0 Instead of being labeled \u201cwildlife,\u201d each shipment was labeled \u201cplastic of craft work\u201d or something similarly deficient. \u00a0 The scheme had been running for at least two years by the time the year 2009 black coral shipments were sent to St. Thomas. \u00a0 The 2009 shipments form the basis of the charges contained in the bill of information.<\/p>\n

A GEM company officer (terminated in early 2010) procured black coral from Peng Chia knowing that there were no CITES certificates. \u00a0 Under the supervision of this company officer, other GEM personnel confirmed that it was part of their jobs to receive and sort through incoming boxes of black coral and that none of those boxes arriving from Hong Kong contained CITES certificates. \u00a0 During the period 2007-2009, those same individuals reported seeing boxes containing black coral that were externally labeled as \u201cplastic of craft work.\u201d \u00a0 GEM never ordered plastic and does not use plastic in any of its manufacturing.<\/p>\n

In January 2009, GEM agreed to pay Peng Chia $38,965.00 for an order of black coral. \u00a0 After the funds were received in February 2009, Peng Chia used its Chinese supplier and Chinese intermediary to send six separate shipments of black coral to GEM in St. Thomas. \u00a0 Through a then company officer, GEM knew about the false labeling and lack of CITES certificates through emails with Peng Chia. \u00a0 On Aug. 19, 2009, Peng Chia sent a shipment comprised of 10 boxes of black coral that were labeled \u201cplastic of craft work\u201d to GEM. \u00a0 \u00a0A CBP Contraband Enforcement Team flagged the shipment as suspicious and contacted FWS based in San Juan, Puerto Rico.\u00a0 As part of “Operation Black Gold,” boxes from all six of the 2009 shipments were seized as evidence during a search of GEM\u2019s St. Thomas facility in September 2009. \u00a0 None of these six shipments was accompanied by CITES certificates. \u00a0 Boxes from the Aug. 19, 2009, May 10, 2009, and other shipments were falsely labeled as \u201cplastic of craft work.\u201d<\/p>\n

The case was investigated by agents of the FWS and NOAA with support from ICE-HSI and CBP. \u00a0 Analysis of coral samples by the FWS\u2019s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case is being prosecuted by Christopher Hale of the Justice Department\u2019s Environmental Crimes Section, Environment and Natural Resources Division, and Nelson Jones of the U.S. Attorney\u2019s Office in St. Thomas.<\/p>\n

11-1410
\nEnvironment and Natural Resources Division<\/p>\n

Special thanks to:<\/em><\/strong><\/p>\n

Susan White, \u00a0 Project Leader
\nPacific Reefs National Wildlife Refuge Complex
\nemail: \u00a0susan_white@fws.gov<\/a> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ph: \u00a0808\/792-9560<\/a>
\nhttp:\/\/www.fws.gov\/marinenationalmonuments\/<\/wbr><\/a>
\n><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><>
\nPacific Remote Islands Marine National Monument
\nBaker, Howland, Jarvis, Palmyra Atoll, Kingman Reef,
\nJohnston Atoll, Wake Atoll NWRs
\nRose Atoll Marine National Monument
\nRose Atoll NWR
\nMarianas Trench Marine National Monument
\nMarianas Arc of Fire, Mariana Trench NWRs
\n><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><> \u00a0 ><>
\nU.S. Fish & Wildlife Service
\n300 Ala Moana Blvd. \u00a0Rm 5-231
\nHonolulu, HI \u00a096850
\nfax: \u00a0808\/792-9585<\/a><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Congratulations to all who made case this a success! \u00a0Our law enforcement and legal teams are a vital part of any successful reef conservation, for\u00a0 without prosecution there would not likely be effective deterrence.\u00a0 Three cheers!! \u00a0hip, hip, hip – hooray!\u00a0\u00a0 “The aggregate financial penalty of $4.47 million makes this the largest for the illegal … Continue reading Justice Dept: U.S. Virgin Islands Company Sentenced for Illegal Trade of Protected Coral Gem Manufacturing Sentenced to Highest Financial Penalty for Illegal Coral Trade<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-563","post","type-post","status-publish","format-standard","hentry","category-posts"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/posts\/563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/comments?post=563"}],"version-history":[{"count":3,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/posts\/563\/revisions"}],"predecessor-version":[{"id":565,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/posts\/563\/revisions\/565"}],"wp:attachment":[{"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/media?parent=563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/categories?post=563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/news\/wp-json\/wp\/v2\/tags?post=563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}