U.S. customs shuts down Chinese company for prison made goods

NEW YORK, NY -- A complex and painstaking investigation into the illegal importation of products assembled by prisoner labor in China culminated in guilty pleas in U.S. District Court in Trenton. This is the first time that there has been a criminal conviction of a Chinese company in a prison labor case.

The products, common binder clips used in offices across America and around the world, were exported to the U.S. in violation of federal law by Allied International Manufacturing Stationery Co. Ltd. (AIMCO), located in Nanjing, China, to its sister company Officemate International Corporation (OIC) of Edison, NJ and its customers. Both companies are owned and controlled by Peter Chen, his wife, and brother-in-law. The Chens reside in West Windsor, NJ. The handles and bodies of the binder clips were manufactured separately at AIMCO's Nanjing factory and then assembled by hand by female inmates at nearby Nanjing Detention Center.

Products made from prison or forced labor are prohibited from importation and knowingly importing prison-made goods is a federal crime. The laws prohibiting such imports are designed to prevent support of human rights abuses as well as to protect U.S. business and laborers from unfair foreign competition.

AIMCO pleaded guilty to transporting the prohibited binder clips to the U. S. and was fined $50,000. Peter Chen, 56, pleaded guilty to tax evasion and is expected to be sentenced at a later date. He also faces payments of back taxes, interest, penalties, and criminal and civil fines. Officemate paid the Customs Service $500,000 in settlement of any potential civil charges from its importation for the prison assembled clips.

"The largest factory of its kind was put out of business in this case. We take these cases seriously. As difficult as they are to document, we are prepared to take them on," said John C. Varrone, Assistant Commissioner of Investigations for the U.S. Customs Service.

The investigation documented that between August 1995 and June 1997, 134 million of the prison-assembled binder clips entered the U.S. in 140 truck-sized containers at various American ports. When the Customs Service was alerted to these activities in May 1997, it intercepted all further shipments.