Jewelry Company Receives Record Penalty in Coral Case

Gem Manufacturing, a Virgin Islands-based jewelry retailer and manufacturer, received a record criminal penalty of $4.47 million on Oct. 26 for illegally importing protected black coral, according to a statement from the U.S. Attorney’s Office.

The company on July 15 pled guilty to seven counts of violations of both the Endangered Species Act and the Lacey Act, which makes it a felony to falsely label wildlife that is intended for international commerce.  

The company was ordered to pay a criminal fine of $1.8 million, which will be distributed to federal environmental protection agencies, as well as $500,000 in community service payments for projects to study and protect black coral. 

It was also ordered to forfeit dozens of jewelry items, 10 artistic sculptures, and more than 13,655 pounds of raw black coral, the total value of which exceeds $2.17 million.  

The company was sentenced to three and a half years of probation and a 10-point compliance plan that includes an auditing, tracking, and inventory control program. Gem was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co., whose management team received prison sentences for providing coral to Gem Manufacturing. 

According to the plea documents, Peng Chia supplied Gem Manufacturing with black coral without the required export permits from CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora), with the shipment mislabeled “plastic or craft work.” The statement noted that Gem Manufacturing “never ordered plastic and does not use plastic in any of its manufacturing.”  

Gem Manufacturing first pled guilty to the charges on May 31, but that first plea was rejected by a federal judge.

“We face a growing challenge to preserve the world’s coral, which 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, in a statement. “We will continue to work with our federal partners to aggressively investigate and prosecute those who violate U.S. law by illegally trading in protected species.”

Gem Manufacturing could not be reached for comment.



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JCK News Director