3 million eggs labelled free range
AWest Auckland chicken farm owner has narrowly avoided prison after misrepresenting about 3 million caged eggs as free range and burning his company’s financial records.
Xue (Frank) Chen was accused of packaging and selling caged eggs as free range after a whistleblower went to the Commerce Commission and a covert surveillance operation was conducted on his Gold Chick poultry farm.
An investigation found his offending at the Henderson Valley Rd property spanned from September 2015 to October 2017 and included millions of falsified eggs being used for wellknown brands such as Farmer Brown.
Yesterday he was sentenced in the
Auckland District Court to a year of home detention, dodging prison after a $50,000 donation to the SPCA and a guilty plea to a single representative charge.
Court documents obtained by the Herald reveal the intrinsic details of Chen’s scam and his desperate attempts to cover it up.
Chen’s primary customer for Gold Chick’s free-range eggs was Zeagold Limited, New Zealand’s largest egg supplier and owned by Mainland Poultry Limited, which has the Farmer Brown brand.
Other Gold Chick customers included Ably Sourced, Eco Foods, Sunset Poultry, Fresh & More, Nature’s Corner and Nola’s.
Zeagold had a deal for Gold Chick to supply its free-range eggs every week between May 2015 and October 2017. During this time more than 3 million eggs were sent to Zeagold and Chen was paid $870,000.
But in June 2017 a former employee of Chen’s came forward to the commission about a packaging scam.
A private investigator was used to watch as Gold Chick, and sometimes Chen personally, used a rental van to acquire caged eggs from another producer, Albert’s Eggs.
After bringing the caged eggs back to his farm, Chen would tell his workers to package them into freerange Farmer Brown cartons for Zeagold.
Chen’s farm was eventually raided in December 2017. Investigators found Albert’s Eggs stickers in the ashes of burned cartons and Albert’s Eggs invoices in his bedroom, which he claimed no knowledge of and blamed his children for leaving there.
After the Commerce Commission completed its search, however, Chen held a meeting with his employees in an effort to identify the informant.
This led to his being charged with wilfully attempting to pervert the course of justice as he was accused of attempting to persuade the whistleblower to drop their complaint. He was found guilty and sentenced last year to two years, two months’ imprisonment. But after a High Court appeal, Justice Graham Lang quashed the conviction and set aside the sentence in October.
While Chen intended to pervert the course of justice, his actions were not sufficient to prove the charge, Justice Lang said.
Chen, who still employs two fulltime staff and some part-time workers, now supplies chicken meat to restaurants and wholesalers.
However, the court heard, he had suffered a drastic loss in business due to Covid-19, with 50 per cent of the restaurants he supplied no longer in operation. But the pandemic proved to be of benefit to Chen and helped keep him out of prison.
“If sentenced to imprisonment that would mean the end of the business and cease of employment which in the current climate would be hard,” Judge Christopher Field said.
Chen, the sole director and shareholder of Gold Chick, which trades under the name Black Water Trading Limited, declined to comment to the Herald about the case.
When asked about the corruption charge, he simply said: “Quashed.”