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Honey laundering: The sour side of nature's golden sweetener Add to ...

Chicago sting

That was true without many exceptions until U.S. investigators got the right people talking. In May, 2008, federal agents arrested a pair of young ALW executives, Stefanie Giesselbach and Magnus von Buddenbrock, outside Chicago's O'Hare International Airport.

Threatened with having to take the lion's share of the blame for ALW's scheme, both began co-operating with investigators.

Momentum quickly picked up: U.S. customs officials seized close to 2,500 drums of suspect honey that year in Minnesota, Illinois and Washington state and highlighted 600 loads of disguised Chinese honey connected to ALW. Declared as Chinese, it would have been subject to nearly $80-million in tariffs.

Investigators also uncovered a slew of ALW e-mails that allegedly document executives knowingly unloading contaminated honey into the food chain. They also appear to be coaching colleagues on cover-up tactics. One instructs employees to discuss seized honey "Please OVER THE TELEPHONE and in German!"; another suggests use of personal rather than corporate e-mail accounts to discuss sensitive shipments.

Other files obtained by U.S. investigators document how shipments of Chinese honey that one buyer had rejected for its chloramphenicol content could be sold to a Texas company ALW execs referred to as the "garbage can" for adulterated honey.

In Canada, Chinese honey is not subject to special taxes. Still, customs and border officials conducted their own "pro-active risk analysis" regarding honey laundering that did not turn up any evidence of a problem, a federal spokeswoman said in an e-mail.

However, with the help of Ms. Giesselbach and Mr. Buddenbrock, U.S. District Attorney Patrick J. Fitzgerald put together a 44-count indictment that names six ALW subsidiaries and 11 executives for their role in an $80-million fraud scheme, including Alexander Wolff, the former chief executive of ALW during the time of the alleged crimes.

While many of the executives are still at large, U.S. investigators arrested four honey brokers in the U.S. who are Chinese or Taiwanese nationals with connections to ALW. All have plead guilty; three have been sentenced to a range of jail terms and deportation proceedings are continuing. The fourth is scheduled for sentencing in Seattle this week.

A reputation soured?

Despite the arrests, the honey industry has been watching suspect import numbers climb.

They are particularly incensed by three countries that, ten years ago, exported zero honey to the U.S., according to Department of Commerce data. India, Malaysia and Indonesia are mysteriously on pace to ship 43 million kilograms of honey into the U.S. by year's end.

"It is widely known those countries have no productive capacity to justify those quantities," said Mr. Phipps, the honey markets expert.

He said a recent EU decision to ban honey from India over worries of lead and other contaminates - much of it widely suspected to be of Chinese origin - has only increased odds that more Chinese honey is bound for U.S. borders.

Mr. Adee, the beekeeper, said he's been attending talks in Washington to convey who the targets of honey laundering probes should really be.

"It's kind of like they're running a car-stealing ring," he said. "You catch the guy stealing the car and put him out of business. But the guy that's laundering, the chop shop or the packer, he just finds another supplier," he said, adding: "I think it's going to keep getting worse until we catch a couple of big ones, give them a little jail time."

In the meantime, the industry is working to shore up honey's reputation, which is at risk of going sour if consumers perceive the commodity as prone to adulteration. An online hub called the True Source Honey Initiative has been set up by an industry group to increase the brand value of "ethically sourced" honey. They have a Facebook page where they trumpet breaks in honey laundering cases and are planning to launch a new traceability initiative in the coming months that will eventually allow honey sellers to trace honey back to its original hive.

"The ultimate goal is to level the playing field for those that are sourcing their honey according to regulations," said Dutch Gold's Ms. Clark.

But implementation will take years, and beekeepers in the U.S., Canada and Australia are struggling to compete with the cheaper, poorer quality imports flooding the market.

"This issue really is a facet of the whole global food trade," said Ms. Pundyk, whose book The Honey Trail explores the impact of globalization on bees. "We have become accustomed to getting whatever we want whenever we want it, and there will always be someone out there keen to pander to this."

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