The violation of the Clean Air Act (CAA) stemmed from the companies' role in importing almost 25,000 ATVs from China without getting them properly tested for emissions compliance. In some cases, the companies arranged for emissions testing on a small number of vehicles, then reused those results to get "certificates of conformity" for other vehicles, hence the double-dipping. In many cases the untested vehicles exceeded federal limits for hydrocarbon and nitrogen oxide emissions.
The concept of trying to get China ATV imports to skate by clean-air laws is nothing new, nor are government fines related to the practice. Last year, California-based Yuan Cheng International Group Inc. (YCIG) and its successor NST Inc. agreed to pay $50,000 in fines as part of an EPA and DOJ settlement related to alleged CAA violations from the importation of more than 17,000 non-certified vehicles. More notably, Pep Boys got slapped with a $5 million fine in 2010 after more than 240,000 China-made items, including generators, lawnmowers and ATVs that the company imported were also found to violate US clean-air regulations. Read the EPA's press release on the Zheng case below and read more about it here.