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Intellectual Property Rights
05/09/2011

3 associated with LA store sentenced for selling lead-tainted counterfeit designer jewelry

3 associated with LA store sentenced for selling lead-tainted counterfeit designer jewelry

LOS ANGELES - A federal judge has sentenced the husband and wife owners of a downtown Los Angeles jewelry store to 37 months in prison for illegally importing and selling counterfeit designer jewelry, some of which tested positive for hazardous levels of lead. A third person who worked at the store received a 30-month prison sentence.

Il Keun Oh, aka James Ken Oh, 58, his wife Jacqueline Oh, 56, owners of Elegance Fashion Mart on East Olympic Blvd., and her brother, Joon Yeop Kim, 48, a manager at the store, appeared Monday afternoon in U.S. District Court before U.S. District Judge Margaret M. Morrow. The defendants pleaded guilty in June 2010 to one count of conspiracy and one count of introducing and delivering a hazardous substance following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

The three defendants pleaded guilty in June 2010 to one count of conspiracy and one count of introducing and delivering a hazardous substance. The hazardous substance charge was lodged after lab tests showed some of the counterfeit jewelry seized in the case contained nearly 20 times the amount of lead deemed safe by the Consumer Product Safety Commission for handling by children. Despite that, the items were labeled as "lead-free."

Monday's sentencings are the culmination of an investigation that began in 2007 when U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) received a tip that the jewelry store was selling counterfeit designer merchandise. During the course of the investigation, ICE HSI agents seized more than 25,000 counterfeit pieces of jewelry and accessories, including necklaces, rings, bracelets, watches, hair ornaments and cell phone charms. The investigation revealed that the counterfeit goods were manufactured in Qingdao, China.

The fakes were purportedly made by well-known designer labels, including Tiffany and Co., Bulgari, Louis Vuitton, Baby Phat, Chanel, Tous, Bebe, Christian Dior, Van Cleef and Arpels, Hello Kitty and Juicy Couture. If the seized products had been genuine, they would have had an estimated retail value of more than $18 million.

"This sentence is a reminder about the high price retailers will pay if they bolster their bottom lines by selling counterfeit goods that put the public at risk," said Claude Arnold, special agent in charge for ICE HSI in Los Angeles. "It should also make consumers think twice before buying fakes and knock-offs. You may save some money up front, but at what cost?"

Sales records recovered during an execution of a search warrant at the business in April 2008 indicated the defendants were distributing counterfeit items to merchants in at least four other states - Texas, Florida, Georgia and Illinois.

ICE HSI received assistance with the investigation from U.S. Customs and Border Protection (CBP); the Federal Deposit Insurance Corporation Office of the Inspector General; and Investigative Consultants, a Los Angeles-area private investigative company that specializes in intellectual property investigations.

As the largest investigative arm of the Department of Homeland Security, ICE 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. Perhaps even more troubling, increasingly the commodities seized in intellectual property rights cases, such as this one, are products that pose potential risks to public safety and security, including critical technology components and counterfeit pharmaceuticals.