Manufacturer pleads guilty to criminal charge of not reporting a product safety issue

Royal Sovereign International Inc., a New Jersey corporation that sold office and home appliances, pleaded guilty today to a criminal information charging it under the Consumer Product Safety Act (CPSA) with failing to report immediately to the U.S. Consumer Product Safety Commission (CPSC) information concerning portable air conditioners allegedly linked to more than 40 fires and one death.
Additionally, Royal Sovereign agreed to a civil settlement with the United States that included a $16,025,000 civil penalty, the maximum civil penalty authorized by the CPSA.
According to court documents, Royal Sovereign, which also did business as Royal Centurian Inc., imported and sold more than 33,000 defective air conditioners between 2008 and 2014. The air conditioners were defective due to a faulty drain motor that could electrically short and cause them to catch fire and burn uncontrollably. The companys CEO, Takwan Lim, previously signed a settlement agreement with CPSC stemming from allegations that a related entity, Royal Sovereign Corporation, sold certain portable ceramic heaters that posed a fire risk. Royal Sovereign recalled the defective air conditioner models in 2021.
Reporting delays not acceptable
It is critical for companies, corporate executives, and their employees to exercise strict compliance with their obligations under the Consumer Product Safety Act to safeguard the American public and recall hazardous products as soon as possible, said Assistant Attorney General Brett A. Shumate of the Justice Departments Civil Division. Companies cannot attempt to evade liability by delaying or avoiding reporting. When they do, they must be held accountable.
The criminal and civil resolutions in this matter show this Offices commitment to protecting the public and holding companies accountable for violating their obligations under the Consumer Product Safety Act, said Acting U.S. Attorney Alina Habba for the District of New Jersey.
Royal Sovereigns failure to report a deadly defect led to tragedy, including the death of a mother and serious injuries to her children, said CPSC Acting Chairman Peter A. Feldman. CPSC will not hesitate to use the full weight of its executive power to pursue violations of the law including criminal penalties and we thank our partners at DOJ for helping to bring this company to justice.
Sales continued despite fires
In pleading guilty, Royal Sovereign admitted that, despite knowing of the defects from numerous consumer complaints and lawsuits, it willfully failed to report information about the air conditioners immediately to CPSC, as was its obligation under the CPSA. According to the information filed in the case, the company misled the CPSC in November 2010 by telling the agency that it was aware of only two fire incidents related to the air conditioners and that the products had been discontinued. In reality, the government alleged, the company was aware of at least 16 fires and continued to distribute the products anyway.
According to therecall notice, a woman died in August 2016 from smoke inhalation and her two children were injured after their Royal Sovereign air conditioner caught fire. In connection with the guilty plea, Royal Sovereign is required to pay $395,786.48 in restitution to victims.
The civil settlement resolves allegations that Royal Sovereign failed to notify the CPSC immediately, as required by law, that its portable air conditioners contained a defect presenting a substantial product hazard and that the products created an unreasonable risk of serious injury or death.
Takwan Lim, the former CEO of the company, died in 2023. Royal Sovereign has permanently ceased all company operations related to the marketing, sale, or distribution of consumer products. In recognition of the companys limited ability to pay, all but $100,000 of the civil penalty was suspended. The consent decree requires Royal Sovereign and certain individuals associated with it to notify the government and to develop internal controls and procedures designed to ensure timely, truthful, complete, and accurate reporting to CPSC as required by law before resuming the marketing, sale, or distribution of any consumer products.
For more information about the products that were recalled, visitwww.cpsc.gov/Recalls/2022/Royal-Sovereign-Recalls-Portable-Air-Conditioners-Due-to-Fire-and-Burn-Hazards-One-Death-Reported
Victims who experienced bodily injury or damage, destruction, or loss of property caused by a fire involving a portable air conditioner made or distributed by Royal Sovereign International Inc., or Royal Centurian Inc., with a model number beginning with PAC-3012, ARP-3012, or ARP-3014, should contact the Department of Justice atThis email address is being protected from spambots. You need JavaScript enabled to view it.by Sept. 5, if they have not previously received compensation and believe they are entitled to restitution.
Posted: 2025-08-06 18:54:15