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Intellectual Property Rights
05/12/2011

2 LA-area men charged with illegally importing $2 million in counterfeit Disney pins to sell over the Internet

Counterfeit Disney pins
Counterfeit Disney pins

FULLERTON, Calif. - Two Los Angeles-area men will appear in state court here Friday to answer to charges stemming from a probe by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Anaheim Police Department that they illegally imported $2 million in counterfeit collectable Disney pins from China and sought to sell them over the Internet.

Robert Edward Smyrak, 52, of Anaheim, Calif., is charged with one felony count of manufacturing and sale of a counterfeit mark and faces a maximum sentence of three years in state prison if convicted. Smyrak, who is currently free on $50,000 bond, will be arraigned Friday. Also charged in the case is Larry James Allred, 57, of Walnut, Calif. Allred faces one felony count of manufacturing and sale of a counterfeit mark and sentencing enhancements for two prior strike convictions for rape in 1975 and kidnapping in 1978. Based on his two prior strike convictions, Allred faces a maximum sentence of 25 years to life in state prison if convicted.

Smyrak is accused of masterminding a fraudulent operation and selling counterfeit Disney pins over the Internet while passing them off as collectibles. Allred is accused of working with Smyrak and assisting in the scheme. The defendants are accused of sending legitimate collectible pins to a manufacturer in China to be replicated and having the fake pins shipped back to them. During the
course of the scheme, Smyrak and Allred are accused of receiving approximately 80 shipments of counterfeit pins from China with an approximate value of $2 million.

"American businesses and American brands are under assault from counterfeiters," said Claude Arnold, special agent in charge for ICE HSI in Los Angeles. "The sale of counterfeit products robs Americans of jobs, stifles American innovation, promotes crime and introduces substandard and sometimes harmful products into commerce. The only ones who benefit from schemes like this are the counterfeiters and they're getting rich at America's expense."

The fraudulent operation was discovered in February when U.S. Customs and Border Protection (CBP) officers and import specialists intercepted a parcel at Los Angeles International Airport addressed to Smyrak containing more than 150 pounds of counterfeit Disney pins.

"Collaboration with agencies such as ICE, the Anaheim Police Department and the Orange County District Attorney is essential to successfully combat crimes involving counterfeiting and piratical goods," said CBP Acting Director of Field Operations Los Angeles, Carlos Martel. "Our cooperative efforts serve as a force multiplier in thwarting the attempts of those who try to enter illegal goods into the commerce of the United States. Through these partnerships, we work to protect America's innovation based economy and the health and safety of its consumers."

Smyrak and Allred were arrested April 14 by investigators from ICE HSI and the Anaheim Police Department. At the time of his arrest, Smyrak is accused of being in possession of more than 100,000 counterfeit pins. A third defendant Cynthia Lynn Pratt Vedder, 43, Smyrak's former girlfriend, was also arrested at that time and charged with one felony count of manufacturing and sale of a counterfeit mark for independently engaging in the same type of scheme.

As the largest investigative arm of the Department of Homeland Security, ICE's HSI plays a leading role in targeting individuals and criminal organizations responsible for producing, smuggling, and distributing counterfeit products. In fiscal year 2010, ICE and CBP intellectual property rights enforcement efforts led to nearly 20,000 seizures, a 34 percent increase compared to the previous year. The total value of those goods, based upon the manufacturer's suggested retail price had the goods been genuine, $1.4 billion.