Former president and CEO of jewelry firm fined almost a million dollars.
Bureau Report
WASHINGTON, DC: Ashu Bhandari, the former president and CEO of GEM Manufacturing LLC, a United States Virgin Islands-based company, was sentenced in federal court in St. Thomas, United States Virgin Islands, for felony customs violations for his role in a scheme to illegally import protected black coral into the United States, the Department of Justice announced.
Bhandari is the last defendant to be sentenced as the result of a far reaching investigation into the illegal trade in black coral. The scheme cost Bhandari’s company, GEM Manufacturing, millions of dollars in financial penalties and sent two of his trading partners to prison.
The court imposed a criminal fine of $918,950 and sentenced Bhandari to one month in jail, to be followed by one month of home confinement and one year of supervised release, during which Bhandari would be required to complete 300 hours of community service and be banned from any business venture involving coral or coral products.
In addition to the fine, Bhandari will be required to pay $229,687 to the University of the Virgin Islands to be used for community service projects designed to research and protect black corals. The court recognized that Bhandari’s sentence was based, in part, on his cooperation with federal investigators in related illicit coral trafficking cases.
On November 7, 2012, Bhandari pleaded guilty to one felony count of false classification of goods for his efforts to conceal his illegal importation of internationally protected black coral in 2009. GEM was in the business of manufacturing high-end jewelry and sculpture products that utilize black coral. During his term as CEO, Bhandari was responsible for ensuring the continued supply of raw black coral for the company. Black corals are considered important habitat for the deep sea marine environment and are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.
Bhandari admitted that by 2008, he learned that GEM’s Taiwanese suppliers of black coral could not obtain legitimate CITES certificates. In spite of this knowledge, Bhandari made a “business decision to go forward†with the Taiwanese suppliers. The Taiwanese suppliers would label the coral shipments as “plastic†in order to fool customs authorities in Hong Kong and the United States. Bhandari admitted that by 2009 he knew that the shipments he arranged on behalf of GEM were coming into St. Thomas falsely labeled.
“Mr. Bhandari actively participated in an illegal scheme to traffic in protected black coral, a trade that has helped deplete a world resource that serves as essential habitat for marine biodiversity,†said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “As this case clearly shows, the Department of Justice will continue to aggressively prosecute those who violate United States law by illegally trafficking in protected species.â€
Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures and used in inlaid jewelry. Black coral is typically found in deep waters and many species have long life spans and are slow-growing. Using