Springfield-based GuildMaster Inc. was sentenced in federal court on Aug. 30 to five years of probation for importing thousands of lamps bearing counterfeit safety certification labels from its manufacturer in China.
GuildMaster, represented in court by company CEO Steve Crowder, was sentenced by U.S. District Judge Gary Fenner, according to a news release from the office of Tammy Dickinson, U.S. attorney for the Western District of Missouri.
GuildMaster is a manufacturer and importer of furniture, lighting, accessories and wall art. On
July 15, the company pleaded guilty to the felony offense of trafficking in goods with counterfeit marks.
In accordance with the terms of the plea agreement, GuildMaster must forfeit to the government 5,585 lamps that were seized by U.S. Customs and Border Protection, valued at approximately $1.8 million, in addition to its probation. U. S. Customs will not impose penalties, but will apply the full amount of the $43,786 in cost bonds previously posted by GuildMaster to defray the government’s expenses in storing the lamps, according to the release.
In December 2011, U.S. Customs discovered lamps imported by GuildMaster bore counterfeit Underwriters Laboratories labels. UL is an independent product safety certification organization accredited for safety testing by the Occupational Safety and Health Administration. For lamps meeting UL safety requirements, manufacturers are authorized to affix labels bearing the words “Portable Luminaire” and featuring the UL mark, which represents to the public that the lamp was meets UL’s safety requirements.
Federal agents intercepted and seized shipments of GuildMaster lamps bearing the counterfeit UL labels between Jan. 10, 2012, and March 21, 2012. During that period, agents seized 10 shipments originating from Dongguan, China, bound for GuildMaster in Springfield. They also executed a search and seizure warrant at GuildMaster’s business office and warehouse in Springfield. The 11 seizures contained more than 5,000 lamps bearing the counterfeit UL labels. Also, in three seizures a total of approximately 567 lamps were seized that were affixed with genuine but unauthorized “Portable Luminaire” labels, which had been provided by UL to another company for its exclusive use and were not authorized for GuildMaster’s use.
In 2001, when GuildMaster operated under the name Decorize Inc., the company purchased Westway Enterprises Pvt. Ltd. and began to purchase lamps manufactured in Dongguan under the GuildMaster brand name. In 2005, the company closed its Springfield manufacturing facility and, according to court records, discontinued its UL safety inspections.
According to the plea agreement, GuildMaster officials maintain its agents and employees had no personal knowledge the company had violated U.S. laws by importing the lamps, but they did acknowledge that the employees of its wholly owned Hong Kong-based trading company, Westway Enterprises, knew the Dongguan factory wasn't UL-certified, according to the plea.
Before the federal seizures, GuildMaster did not inspect the lamps coming from China to check their authenticity, and in its guilty plea, admitted these marks would have been found if proper inspection had been performed, the release said.
According to the factual basis for the plea, on March 12, 2012, federal agents interviewed Guohua “Peter” Luo, the employee responsible for quality control at the Dongguan plant. Luo stated in continuation of a practice started by a former facility production manager, he would order by phone UL labels from an individual identified in court records as “Mr. Wu.” At a cost of 16 cents for each label, a person delivering the labels would collect the payment for Wu. Agents’ attempts to locate Wu were unsuccessful, according to court records.
GuildMaster began leasing and operating its Dongguan factory in April 2009, two months after the company moved to deregulate its common stock and discontinue public reporting, citing increases in reporting costs after major scandals at such companies as Enron and WorldCom, according to Springfield Business Journal archives.
The case was prosecuted by Assistant U.S. attorneys Steven Mohlhenrich and Cynthia Hyde. It was investigated by U.S. Immigration and Customs Enforcement's Homeland Security Investigations.
