Columbus, OH – A New Jersey-based chemical company, Alden Leeds, Inc., and its president, Mark Epstein, have been sentenced for participating in a long-running scheme to evade import duties on chlorine used in swimming pools and spas. The case, investigated by a multi-agency task force including the U.S. Environmental Protection Agency (EPA), exposed a complex network of false statements and financial maneuvering designed to skirt U.S. Customs regulations and unfairly compete with domestic manufacturers.
According to court documents, Alden Leeds, Inc., in conjunction with a Columbus, Ohio-based intermediary, Caiwei Sheng, deliberately misrepresented the origin and pricing of imported chlorine. From 1998 through at least June 2012, Sheng operated businesses that served as fronts for importing the chemical from China. To avoid hefty anti-dumping duties – taxes imposed on goods sold below fair market value – Sheng utilized a shell corporation in Vietnam, falsely claiming the chlorine originated there. China faced a 286% anti-dumping duty at the time, while Vietnam did not.
The scheme involved a deliberate inflation of the declared price of the chlorine at U.S. Customs. Sheng would receive payment for the higher “invoice price,” then wire the actual, lower price back to the originating companies in China and Vietnam. The difference was then funneled back to Alden Leeds, Inc., disguised as a “consulting fee” paid to a sister corporation. This rebate system allowed the company to effectively lower its costs while misleading Customs officials.
Federal prosecutors outlined the conspiracy, revealing that Epstein knowingly participated in the fraudulent scheme, directing the financial transactions and ensuring the false documentation was maintained. The elaborate setup was intended to create the illusion of legitimate business dealings while concealing the true origin and price of the imported chemicals. The investigation revealed repeated violations of federal law, highlighting a calculated effort to defraud the U.S. government and gain an unfair competitive advantage.
Penalties & Prosecution
On February 1, 2017, Epstein pleaded guilty to one count of conspiracy to make false statements and violate U.S. customs laws (18 U.S.C. 371), and one count of entry of goods by means of false statement (18 U.S.C. 1001). He was sentenced to eight months in prison and four months of home confinement, and ordered to pay $500,000 in restitution and forfeiture. Alden Leeds, Inc. received three years of probation and was ordered to pay $2.25 million in restitution to U.S. Customs. The company also agreed to donate 2,765 gallons of hospital-grade disinfectant to Haiti. Sheng was previously sentenced in August 2015 to one year and one day in prison and ordered to pay $100,000 in restitution for violating Customs laws and EPA regulations concerning truthful statements about imported chemicals (7 U.S.C. 136l(b)(1(A), 18 U.S.C. 1956(h), 18 U.S.C. 542, 18 U.S.C. 545).
Key Facts
- Defendant: Alden Leeds, Inc. and Mark Epstein
- Location: Columbus, Ohio (import operations), New Jersey (company headquarters)
- Crime: Import fraud, false statements to U.S. Customs, violation of anti-dumping regulations.
- Scheme: Misrepresenting the origin of chlorine imports from China as Vietnam to avoid 286% anti-dumping duties. Inflated invoice prices and rebates to conceal true costs.
- Penalties: Epstein – 8 months prison, 4 months home confinement, $500k restitution/forfeiture. Alden Leeds, Inc. – 3 years probation, $2.25M restitution, donation of disinfectant. Sheng – 1 year + 1 day prison, $100k restitution.
- Agencies Involved: U.S. Attorney’s Office, EPA, Homeland Security Investigations (HSI), IRS Criminal Investigation, FBI
U.S. Attorney Benjamin C. Glassman emphasized the importance of truthful reporting to Customs and fair competition in the import market. The case serves as a warning to those who attempt to circumvent trade regulations and underscores the commitment of federal agencies to investigate and prosecute such offenses.
Source: EPA ECHO Enforcement Case Database
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