Two Plead Guilty to Role in $69 million Counterfeiting Operation
According to the U.S. Attorney’s Office for the District of Arizona, Wei Tung Lam and Sau Kuen Chan pled guilty May 29 to charges of conspiracy to bribe a public official and to traffic in counterfeit merchandise. Lam also pled guilty to trafficking in counterfeit goods. Both defendants were being prosecuted for their role in a counterfeiting operation that allegedly imported more than $69 million of fake Nike shoes into the United States from China. The U.S. Attorney's press release states that Lam and Chan were the last to plead guilty of five individuals who were arrested in August 2006 in what has been described as one of the largest counterfeiting operations in U.S. history. A conspiracy conviction carries a maximum penalty of five years in prison, a $250,000 fine or both. A conviction on charges of trafficking in counterfeit goods carries a maximum of 10 years imprisonment, a $2 million fine or both.
The investigation leading to the arrests was conducted by U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP) and culminated in the seizure of 78 sea cargo containers bearing over $69 million of counterfeit merchandise. According to the indictment, the defendants attempted to bribe an undercover federal agent posing as a CBP officer to falsify records so that it would appear as if the shoes were re-exported to Mexico, when, in fact, they were intended for sale in the U.S.
Guilty Plea in California Yu-Gi-Oh! Prosecution
A Los Angeles man pleaded guilty Tuesday to a felony count of attempted trafficking in counterfeit goods, reports the Monterey Herald. Luis Alfonso Lopez Canche, charged with attempting to sell more than $1 million of counterfeit Yu-Gi-Oh! cards, probably manufactured in China, faces up to 10 years in prison and a fine of up to $2 million. In March 2005, Lopez agreed to sell 115,000 decks of the popular Yu-Gi-Oh! cards to federal agents, the government said. The government investigation grew out of a private investigation conducted by Upper Deck, owner of the Yu-Gi-Oh! trademarks. (Yu-Gi-Oh! is one of the best selling trading card games in the United States.)
| Comments (0)South Florida Supplier to Alber Pleads Guilty
Weston Florida resident Michael A. Carlow pleaded guilty in federal court in Kansas City yesterday to acting as the middleman in the sale of 200,000 bottles of fake and illegally imported Lipitor, a cholesterol drug, to Doug Albers' company, Albers Medical Distributors. Carlow, 54, faces up to five years in federal prison and a $250,000 fine under his plea agreement with the U.S. Attorney in western Missouri where Alber was based. Charges against Carlow for racketeering, organized fraud and illegal drug sales are also also pending in South Florida. Carlow's attorney, Lance David Sandage, has been quoted saying Carlow is likely to get the maximum five year sentence in the Missouri case because of the sophistication of the conspiracy and the number of victims.
According to prosecutors, Carlow sold $42 million of illegal drugs to Albers Medical Distributors including $9 million of fake Lipitor, resulting in one of the nation's largest drug recalls. Carlow's associates made the counterfeit Lipitor in a Miami warehouse and smuggled Lipitor made for sale only in South Americainto the U.S. Carlow's role was to create a fake paper trail to make the phony drugs seem genuine.
Plea Deal in Case of Counterfeit Baseball Caps and Batteries
In July 2005, ICE agents and local police working in cooperation with Major League Baseball and the Detroit Tigers, executed a search warrant at a Michigan business owned and operated by Ibrahim Hijaki and seized 16,372 counterfeit baseball caps. That was not all that they found, however. In addition to Hijaki's stock of phony Tigers caps, officials found and seized 17,438 counterfeit Duracell batteries. The total value of the goods seized from Hijaki was around $175,000. However, of greater concern than the economic impact in a case like this, is the potential threat to public safety. As ICE agent Brian Moskowitz pointed out, "In addition to hurting the U.S. economy, counterfeit items, such as the 17,000 seized batteries, are a significant public safety issue. Counterfeit batteries aren't produced with consumer safety in mind, and have been known to get dangerously hot and even explode."
This case illustrates a growing (and disturbing) trend in counterfeiting operations. These days, the very same individuals who traffic in counterfeits that cause only economic injury, such as sporting goods and luxury items, are frequently also trafficking in counterfeit pharmaceuticals, batteries, extension cords and other fakes that can seriously injure or even kill users.
According to an ICE press release, Hijaki entered a guilty plea yesterday. However, under his plea agreement he faces a maximum sentence of only six months (and a possible fine of up to $250,000). No explanation was given for this seemingly short maximum sentence.
Pharmacist Albers Enters Guilty Plea
As expected, Kansas pharmacist Doug Albers pleaded guilty today to two counts of selling counterfeit and misbranded drugs. What I find amazing about this case is the sheer volume of counterfeit medication involved. Although Albers only admitted selling admitted two boxes of counterfeit and misbranded Neupogen in connection with his plea, in mid-2003, at the instigation of the FDA, his company, Albers Medical Distributors, recalled more than 18 million counterfeit Lipitor tablets. The government plans to ask the court to take this into account in its sentencing of Albers in February. In the meantime, Albers Medical Distributors is getting out of the pharmaceuticals business and Doug Albers' pharmacy is being sold.
| Comments (0)Miami Jury Convicts Cigar Counterfeiter
A federal jury in Miami returned a guilty verdict today in US v. Penton, finding that defendant Juan Penton had trafficked in counterfeit cigars in violation of 18 USC 2320. I worked on the investigation that led to Penton's arrest as Florida counsel for Altadis USA, along with my former partner, Chuck Grimes. Federal trials of four other accused cigar counterfeiters who were subjects of the same investigation are scheduled for later this fall.
Third Operation Remaster Guilty Plea
On May 25, 2006, the third and final defendant in the Operation Remaster prosecution pleaded guilty to five federal criminal counts yesterday afternoon. The defendants in the Operation Remaster case were arrested after law enforcement seized approximately 494,000 pirated music, software, and movie CDs, and DVDs, and more than 5,500 stampers from locations in California and Texas. (A single stamper can be used to manufacture 50,000 to 80,000 counterfeit CDs of a single copyrighted work.) According to the Justice Department, many of the pirated CDs contained counterfeit FBI Anti-Piracy Seals, record label trademarks, silk-screened artwork, and inserts to make them appear legitimate. The copyright and trademark violations mostly involved musical works by Latin artists. As part of his plea agreement, the defendant agreed to forfeit the counterfeit CDs, stampers, masters, and inserts as well as his interest in equipment used to commit the violations, including a replication machine, a DVD copier, a CD label machine, an offset printer, two overwrapping machines, and two shrink wrapping machines.
Operation Remaster is an undercover law enforcement operation conducted by the Rapid Enforcement Allied Computer Team (REACT) Task Force and the FBI. The operation is targeting large-scale illegal replicators of copyrighted music and software.
The defendant pleaded guilty to the following five counts:
(1) Conspiracy to Commit Criminal Copyright Infringement and to Traffic in Counterfeit Goods and Labels, in violation of 18 U.S.C. ¤ 371;
(2) Criminal Copyright Infringement and Aiding and Abetting, in violation of 17 U.S.C. ¤ 506(a)(1)(A), and 18 U.S.C. ¤¤ 2319(b)(1) and 2;
(3) Trafficking in Counterfeit Labels and Aiding and Abetting, in violation of 18 U.S.C. ¤¤ 2318(a), 2318(c)(3), and 2;
(4) Trafficking in Counterfeit Goods and Aiding and Abetting, in violation of 18 U.S.C. ¤¤ 2320(a) and 2; and
(5) Counterfeiting a Department Seal (the FBI anti-piracy seal used on pirated music
Defendant Zhai is scheduled to be sentenced by U.S. District Court Judge James Ware on November 13, 2006, at 1:30 p.m. Wen and He--two other defendants in the investigation--are scheduled to be sentenced by U.S. District Court Judge Ronald M. Whyte on October 16, 2006 at 9:00 a.m. Click here for more information.
Pharmacist Convicted: Importer of Counterfeit Viagra and Cialis from China
On May 24, 2006, a Texas jury convicted James George, a licensed pharmacist and owner of Lifeway Pharmacy in San Jacinto, Texas, of conspiracy to introduce in interstate commerce counterfeit and misbranded pharmaceutical drugs and trafficking in counterfeit drugs from China. The jury deliberated less than two hours before finding George guilty on all six counts alleged in the indictment. Evidence presented at trial showed that ICE inspectors at the Dallas Fort Worth Airport had found large quantities of Viagra and Cialis in a package shipped from China and addressed to George's home. The shipping documents identified its contents as health food. Pfizer and Eli Lily confirmed the drugs were counterfeit. On December 9, 2004, a controlled delivery of the package was made by an FDA agent posing as an employee of a delivery company. When confronted by the agent, George said, and later testified at trial, that he did not know the drugs were counterfeit and had planned to send the drugs to Nigeria.
Testimony showed that George ordered the drugs from China over the internet for 30 to 35 cents a tablet. Click here for more information.