Gov't to levy hefty fine in toy case

WASHINGTON (AP) — The federal government slapped a hefty $1.3 million fine on a toy company that sold popular arts-and-crafts beads that were linked to a dangerous drug and sickened about a dozen children.

The civil penalty, announced Thursday, marks the third largest toy-related fine issued by the Consumer Product Safety Commission.

The Aqua Dots toy beads were imported by Spin Master in 2007 and recalled after tests showed they were coated with a chemical that, when ingested, can metabolize into the so-called "date-rape" drug gamma hydroxybutyrate (GHB). The compound can induce unconsciousness, seizures, drowsiness, coma and death.

The commission alleged that Spin Master knowingly failed to report a defect and hazard associated with Aqua Dots. It also accused the company of knowingly importing and selling a banned hazardous substance. CPSC said Spin Master, based in Toronto with a subsidiary in Los Angeles, agreed to the settlement but denies allegations that it knowingly violated the law.

The toys consisted of tiny colored beads that stick together when sprayed with water, forming fun designs and shapes. About 4 million of the kits were recalled in November 2007.

The commission says Spin Master had enlisted an outside testing company to see whether the toy beads were safe, but the testing was inadequate.