East Bay Shipping Company Owner Admits to Illegally Transporting Toxic Chemicals

The former CEO of a Union City shipping company agreed to plead guilty to illegally transporting hazardous materials and to retain independent oversight, federal prosecutors announced last week.

Peiwen Zhou, 55, pleaded guilty to illegally transporting hazardous materials and failing to properly declare imports of toxic substances, court records show. He is scheduled to be sentenced in April, and is facing a maximum sentence of five years in prison and a $250,000 fine.

Zhou, a Palo Alto resident, is the owner of AK Scientific Inc, a company that ships chemicals used in pharmaceutical discovery and other scientific research. But federal investigators found the company was mislabelling and mishandling some chemicals. Zhou was initially charged with smuggling.

As part of the plea deal, Zhou admitted his company failed to obtain proper certifications on numerous occasions, and once shipped a chemical from China under a different name. He pleaded guilty to one felony violation of the Hazardous Materials Transportation Act and one misdemeanor violation of the Toxic Substance Control Act.

Zhou agreed to step down as CEO, and his company will pay a $100,000 fine in addition to hiring an independent monitor to make sure it complies with transportation regulations. If the company complies for three years, the charges against it will be dismissed, federal prosecutors said.

“Americans must be protected from those who skirt laws designed to protect workers and the public from mismanagement of toxic substances,” said EPA Administrator Scott Pruitt in a written statement. “The illegal importation and shipment of toxic substances in this case represents a clear threat to public safety and we will hold the responsible parties accountable under the law.”