Sentencing for ChemNutra Over Misdemeanor Violations in Melamine Litigation

Sentencing for ChemNutra Over Misdemeanor Violations in Melamine Litigation
KANSAS CITY, MO -- (Marketwire) -- 02/05/10 -- A U.S. Magistrate Judge ordered ChemNutra Inc. and its two principals, Sally and Steve Miller, to pay $35,000 in fines after they plead guilty to two strict liability misdemeanor violations of the Food, Drug and Cosmetic Act. The government had earlier agreed to dismiss 24 other misdemeanor charges and the single felony charge of wire fraud conspiracy. (United States of America vs. Sally Miller, Stephen Miller and ChemNutra Inc., Case No. 08-00023-01CR-W-DW.) The sentencing took place at the U.S. District Court in Kansas City, Missouri today. The company was fined $25,000 and the Millers were fined $5,000 each. Along with being fined, the defendants were placed on probation for three years.

"There was never any criminal knowledge or intent on our part and the U.S. government realized that very early on," says Steve Miller, former CEO of ChemNutra. "We used the best safety procedures in the industry at the time to import products. We were caught up in the fraud perpetrated by an unscrupulous Chinese manufacturer that decided it could make extra money by putting protein-enhanced chemicals into the products it was selling to the U.S. Problems with melamine continue to this day in China, most recently with baby formula and chocolate. Until the proper quality controls and safeguards are put in place by China's testing agencies, these instances of melamine contamination will likely continue."

In 2006 and 2007, ChemNutra purchased wheat gluten from a Chinese trading/export company, which had bought the wheat gluten from two Chinese manufacturers. "One of the manufacturers illegally added melamine to boost the protein content of the wheat gluten," says Miller. "The Department of Justice said we should have known that the manufacturers and trading company had caused the wheat gluten not to be inspected by the Chinese government. We believe that was impossible to know."

ChemNutra and two other U.S. import companies sold the contaminated gluten to U.S. pet food manufacturers. The gluten was mixed into their products resulting in the illness and death of dogs and cats throughout the U.S. The other two import companies were never charged.

"A company can face criminal liability if it was part of a chain of commerce that led to the distribution of a misbranded or adulterated food product. Under the Food, Drug and Cosmetic Act, a company can have no knowledge of the adulteration or misbranding of the product but still be held criminally liable, as was the case here," says Robert J. Becerra, an attorney with the Miami law firm of Fuerst Humphrey Ittlemen PL who represented ChemNutra and Sally Miller. "The real problem lies with the lack of quality control of certain food products made in China. Prosecuting the importer who is without knowledge does not solve this very serious issue. Only better awareness, together with stringent due diligence and better inspection procedures, can prevent reoccurrence of this tragedy."

Robert J. Becerra, Esq.
Fuerst Humphrey Ittleman PL
1001 Brickell Bay Drive, Suite 2002
Miami, FL 33131
Tel: (305) 350-5690
Cell: (305) 803-9872
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