Peiwen Zhou, AK Scientific Indicted in Hazardous Chemical Smuggling

Peiwen Zhou, a 53-year-old Palo Alto man and owner of Union City-based AK Scientific, has been indicted on federal charges for orchestrating a scheme to smuggle and illegally transport hazardous chemicals into the United States. Authorities unsealed a multi-count indictment accusing Zhou and his company of conspiracy to defraud the United States, smuggling, and repeated violations of the Toxic Substances Control Act (TSCA) and the Hazardous Materials Transportation Act (HMTA).

According to the U.S. Attorney’s Office in Northern California, Zhou and AK Scientific routinely mislabeled and improperly packaged hazardous chemicals imported from South Korea, Poland, India, and New Zealand before shipping them to universities, research labs, and other U.S. institutions. The indictment alleges that the defendants bypassed federal safety protocols by failing to file required import certifications and deliberately concealing the true nature of the shipments, putting public health and transportation safety at risk.

Charges against Zhou include one count of conspiracy to defraud the United States (18 U.S.C. § 371), carrying a maximum penalty of 5 years in prison and a $250,000 fine, and one count of smuggling (18 U.S.C. § 545), punishable by up to 20 years in prison and a $250,000 fine. He also faces two counts of TSCA violations—each punishable by 1 year in prison and a $50,000 fine—and seven counts under the HMTA, each carrying up to 5 years in prison and a $250,000 fine.

AK Scientific, the corporation Zhou founded and operates as CEO, faces steep corporate penalties. If convicted, the company could be fined up to $500,000 and placed on five years of probation for conspiracy and smuggling charges. Each TSCA violation carries a maximum $200,000 fine and five years’ probation, while each HMTA count exposes the company to a $500,000 fine and five years’ probation. Additional special assessments may apply.

The investigation was led by the Environmental Protection Agency’s Criminal Investigation Division, the U.S. Department of Transportation’s Office of Inspector General, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Authorities emphasized that the improper handling and labeling of hazardous materials posed serious risks to customs agents, transport workers, and end recipients.

Zhou and a corporate representative are scheduled to appear at 9:30 a.m. on Tuesday, February 21, 2017, before U.S. Magistrate Judge Donna Ryu in Oakland for an initial hearing. The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco. Any sentence, if convicted, will be determined by the court under the U.S. Sentencing Guidelines and 18 U.S.C. § 3553.