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Project Honeygate

International Press Coverage

Since Wednesday there has been huge international press coverage of “Honeygate”, the largest most sophisticated and most extensive antidumping fraud involving collusion of exporters, importers and packers.  Articles have appeared in Reuters, Bloomberg News, Wall Street Journal and Canadian newspapers.  The investigation is not over and we expect that there will be various confessions forthcoming.

 This information, along with my market report, which was sent earlier, subtitled “The march to monopoly has lost its momentum,” is in email blasts, on websites and in print in The American Beekeeping Journal, The Alberta Bee News, and the AHPA website.

 A Bloomberg News report quotes Senator Charles Schumer of New York, who played a decisive role in 2011 in arranging the Senate Finance Committee hearing at which Richard Adee gave decisive testimony.  The point was to bring the cunning collusions of exporter, importer and packer to gain unfair competitive advantage over those who played by the rules and refused to engage in illegal activity to maximize their short term profits.  See below:



Feb. 20, 2013

Honey Sting Leads to U.S. Charges of Smuggling From China

Five people and two honey processing plants were charged by U.S. authorities for their involvement in smuggling and mislabeling honey from China.

In one of the largest honey anti-dumping cases in U.S. history, the individuals and companies allegedly mislabeled Chinese-origin honey in an attempt to skirt more than $180 million in anti-dumping duties.

“The honey industry has been under assault due to anti- dumping circumvention,” Daniel Ragsdale, deputy director of U.S. Immigration and Customs Enforcement, said at a news conference yesterday in Washington. Ragsdale said the case marks the “tip of the iceberg” in the agency’s pursuit of commercial fraud.

The charges from the probe, called “Project Honeygate,” mark the culmination of a two-part investigation that began in 2008 and included U.S. Customs and Border Protection and the U.S. attorney’s office in the northern district of Illinois. In the first phase, federal authorities charged 14 individuals for allegedly evading about $80 million in anti-dumping duties.

The latest phase of the investigation included an undercover agent, who took a role as director of procurement with a cooperating honey supplier. The resulting investigation led to two of the nation’s largest honey suppliers -- Honey Holding and Groeb Farms Inc. -- entering into deferred prosecution agreements with the government and paying $1 million and $2 million in fines, respectively.

‘Full Responsibility’

“We take full responsibility for and deeply regret any errors that were made in the past regarding the import of honey,” Rolf Richter, the chief executive officer of Onsted, Michigan-based Groeb Farms, said yesterday in a statement. As part of the agreement to resolve the charges, the company implemented a new compliance program and dismissed senior executives responsible for the actions.

Honey Holding, which is now doing business as Honey Solutions, cooperated with the investigation, officials said yesterday. An individual who answered the phone at Baytown, Texas-based Honey Solutions declined to comment on the charges. The individual declined to give her name.

“Not only do these products disadvantage domestic producers and take jobs away from U.S. workers, these goods are frequently produced to standards can adversely impact health and safety,” said Thomas Winkowski, the chief operating officer for Customs and Border Protection.

‘Honey Laundering’

U.S. Senator Charles Schumer, a New York Democrat who has pushed federal officials to crack down on counterfeit honey imports, said the “successful sting operation is sure to be a buzz kill for would-be honey smugglers.”

“We need a zero-tolerance policy when it comes to honey laundering,” Schumer said in a statement.

The U.S. International Trade Commission in November voted to keep in place an order to prevent honey from China from being sold in the U.S. below production costs.

The U.S. imported $416 million dollars worth of natural honey last year, a 7 percent increase from 2011, according to the Census Bureau. It exported about $20 million worth of the product last year, a decline of less than 1 percent from 2011.

To contact the reporter on this story: Phil Mattingly in Washington at

To contact the editor responsible for this story: Steven Komarow at

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