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Intellectual Property Rights
12/15/2010

8 arrested in Rockford, Ill., for wire fraud, trafficking in counterfeit goods

ROCKFORD, Ill. - Eight Rockford residents were arrested and charged this week for trafficking in counterfeit goods and wire fraud. The charges resulted from a joint investigation conducted by the following agencies: U.S Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), U.S. Department of Agriculture's (USDA) Office of Inspector General, the FBI, the Internal Revenue Service's Criminal Investigation Division, and the Rockford Police Department.

Federal agents and local law enforcement officers arrested three individuals Dec. 14 on charges of trafficking in counterfeit goods, and four individuals on charges of wire fraud. The eighth individual was arrested Dec. 15 on wire fraud charges. The investigation began in June 2009.

Two criminal complaints were filed Dec. 14 in the Northern District of Illinois charging three defendants with trafficking in counterfeit goods. As set forth in those complaints, in June 2009, law enforcement had been notified that several stores in Rockford were believed to be selling counterfeit Nike brand products. Only licensed retailers may sell certain trademarked brands.

During the course of the investigation, merchandise purportedly made by Nike, Timberland, Ed Hardy, Louis Vuitton, Christian Audigier, Ralph Lauren, Gucci, Coach, Prada, and other manufacturers, were either observed at and/or purchased from various stores. These stores included: Westside Grocery, 3001 W. State St. and Fashion Show, 2904 B W. State St., both in Rockford. After inspecting the items purchased during this investigation, it was determined that all items were counterfeit and bore counterfeit marks.

Five of the criminal complaints filed Dec. 14 and 15 charged five defendants with wire fraud.

As set forth in those complaints, in 1997 the U.S. Department of Agriculture, through the State of Illinois Department of Public Aid, began converting from a traditional paper food-stamp coupon system to what is known as Electronic Benefit Transfer card system. In Illinois, this system is known as "LINK card benefits." With limited exceptions, these benefits may only be exchanged or redeemed for approved food products, and cannot be redeemed for non-food products or for cash.

During the investigation, numerous purchases of non-food items were made using LINK cards. In addition, on numerous occasions, people were allowed to redeem LINK benefits for cash. The five defendants charged with wire fraud in connection with the LINK benefits were employed by or worked at the following Rockford locations: Rockford Food and Liquor Store, 1725 Kishwaukee St.; Lucky Food Mart, 425 15 Ave.; City Food Mart, 2506 W. Auburn St.; Sal's Food Mart, 2704 W. State St.; AFIF Gas (formerly Auburn Amoco), 3721 W. Auburn St.; and Westside Grocery, 3001 W. State St.

The following three men are charged with trafficking in counterfeit goods: Mohammad Hamad, 42, Mohammad Hariz, 19, and Abdul Hariz, 21.

The following five men are charged with wire fraud: Nassir Ali, 41, Haitham Hariz, 24, Abdulaziz Saeed Abdullah Mohammed, 36, Kassim Hariz, 44, and Saleh Quhshi, 37.

"Trafficking and selling counterfeit goods, as alleged here and if later proven to be true, is by no means a victimless crime," said Gary Hartwig, special agent-in-charge of ICE's Office of Homeland Security Investigations in Chicago. "Trademark piracy robs Americans of jobs, harms legitimate businesses, and introduces sub-standard products into the U.S. marketplace. Our nation's counterfeiting laws are in place to protect the consumer, as well as those who hold the rights to the products."

The Office of Inspector General at USDA is responsible for conducting investigations into fraud and criminal conduct affecting USDA nutrition assistance programs. "We were very pleased with the assistance and support we received from our partners in the Rockford Police Department and other federal agencies in this investigation. The number of subjects involved in this investigation and the type of illegal activity that was occurring required sustained coordination and focus by the team we put together," said Joe Smith, special agent-in-charge of the U.S. Department of Agriculture's Office of Inspector General, Midwest Region in Chicago.

Assistant U.S. Attorney John G. McKenzi, Northern District of Illinois, is prosecuting the case.

Members of the public are reminded that a criminal complaint is only a charge and is not evidence of guilt. Each defendant is entitled to indictment by a federal grand jury and a fair trial at which the government will have the burden of proving guilt beyond a reasonable doubt.