U.S. authorities allege executives of Lawrenceville, Ga. paper company Apego Inc. dodged more than $20 million in custom duties for imported Chinese paper.
The case came to light when a fired secretary of the company's chief executive officer -- also his ex-lover -- came forward with a laptop computer with incriminating evidence, The Atlanta Journal-Constitution reported Tuesday.
Prosecutors allege Apego executives directed a scheme in which paper from China was mislabeled as a product of Taiwan.
U.S. customs have imposed 76.7 percent duty charge on paper from China since 2006, when the Commerce Department declared China was "dumping" paper in the United States at unfairly low prices.
Authorities now say Apego first hired workers in Taiwan to switch labels on paper bought from the Wantanabe Group in China.
The scheme later allegedly escalated to include bribes to Taiwanese officials and a paper trail of fraudulent documents.
The scheme became so involved that one company employee in an email once remarked, "everybody is overwhelmed from being so busy making fake documents," court papers say.
On Monday, former Apego Chief Financial Officer Jennifer Chen pleaded not guilty to taking part in the scheme. She was released on bail.
Also charged is company President and Chief Executive Officer Chi-Cheng Gung, known as "Curtis." However, he is currently in Taiwan and reportedly suffering from a potentially fatal medical condition.
He is expected to surrender to authorities in November, Assistant U.S. Attorney Brian Pearce said.
Also indicted were Zuoru He, 66, an executive at The Wantanabe Group in China and Chong-Sien Wu, 69, the founder of Apego, who is Taiwanese.
Neither Wu nor He appeared in court. Warrants for their arrest have been issued, the newspaper said.