Peiwen Zhou, Felony Transportation of Hazardous Materials, California 2018

Peiwen Zhou, 55, of Palo Alto, California, pleaded guilty in federal court in San Francisco to illegally transporting hazardous materials and failing to properly declare imports of toxic substances.

The plea was accepted by the Honorable James Donato, U.S. District Judge, and was announced by United States Attorney Brian J. Stretch, Environmental Protection Agency Special Agent in Charge Jay Green, and U.S. Department of Transportation Office of the Inspector General Regional Special Agent in Charge William Swallow.

Zhou admitted that he did not adequately train employees at his company, AK Scientific, Inc., on the requirements of the Hazardous Materials Transportation Act, or HMTA. He also admitted that he caused AK Scientific employees to ship hazardous materials on a number of occasions without properly labeling, marking, and identifying the packages as containing such materials, in violation of the HMTA.

Zhou further admitted that he caused AK Scientific employees to fail to comply with the rules and regulations set forth in the Toxic Substances Control Act, or TSCA. Specifically, Zhou admitted that he caused AK Scientific employees to not file TSCA import certifications on a number of occasions when the company imported chemical substances into the United States, including on one occasion when the chemical substance 1,2-dibromoethane was shipped to AK Scientific from China under a different name.

As part of today’s agreement, Zhou pleaded guilty to a felony violation of the HMTA and a misdemeanor violation of TSCA. He also agreed to step down as CEO of AK Scientific and to play no role in the company’s shipping or regulatory functions. The company, meanwhile, entered into a deferred prosecution agreement in which it agreed to pay a $100,000 fine and retain an independent monitor to oversee compliance.

The maximum statutory penalty for Zhou for violating the HMTA is five years in prison and a fine of up to $250,000; the maximum statutory penalty for Zhou for violating TSCA is up to one year in prison and a fine of up to $50,000 for each day of violation. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3.

Related Federal Cases