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Intellectual Property Rights
10/01/2010

Seattle woman sentenced for selling counterfeit exercise equipment

SEATTLE - A Washington state woman who sold counterfeit exercise equipment on the Internet was sentenced to 30 days in federal prison Friday, following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Office of Homeland Security Investigations (HSI).

Genevieve Rullan, 34, of Seattle, was also sentenced to 120 days of home confinement, 150 hours of community service, three years of supervised release and ordered to pay $64,500. She pleaded guilty in June to a single count of trafficking in counterfeit goods.

According to the plea agreement, a shipment addressed to Rullan cleared customs at the Port of Seattle in August 2009. Rullan informed her customs broker that the shipment was "exercise equipment that is not branded."

HSI's investigation showed that the container held about 320 counterfeit Ab Circle Pros. After Rullan received the equipment, she advertised, promoted and ultimately sold the exercisers on eBay and other websites, misleading the buyers as to the authenticity of the product.

In November 2009, another shipment addressed to Rullan arrived at the Port of Seattle. This time she told her customs broker that the shipment contained generic and unbranded items. This shipment also contained about 320 counterfeit Ab Circle Pros, which she sold on the Internet.

During the investigation into Rullan's illegal activities, an HSI agent communicated with her over the Internet and questioned the authenticity of the equipment she was selling on eBay. Rullan responded that the items were not fake, explaining they were being sold at a discounted rate because "that is the going rate on eBay."

In December 2009, HSI agents executed federal criminal search warrants at Rullan's home and seized 210 counterfeit Ab Circle Pros. Agents also seized evidence of a double invoicing scheme, other types of counterfeit exercise equipment and information that she had sold more than 1,000 counterfeit items on eBay.

The investigation showed that some customers questioned the authenticity of the items Rullan was selling. She responded to the inquiries by insisting the products were genuine, even providing a letter to eBay falsely claiming that she was an authorized distributor of the exerciser units on behalf of the legitimate manufacturer Fitness Brands, Inc. This bogus claim ultimately damaged the reputation of the manufacturer.

"This case serves as a reminder that the sale and purchase of counterfeit goods is not a victimless crime," said Leigh Winchell, special agent in charge of ICE HSI in Seattle.

"This type of illegal behavior robs legitimate businesses of millions of dollars in lost revenue and provides an unwitting public with sub-par merchandise. HSI will continue to investigate these crimes in an effort to deter this activity in the United States and around the world."

"When a counterfeiter like Ms. Rullan sells an illegitimate product, trademark holders suffer direct and immediate financial harm, in the form of lost purchases of their legitimate product," Assistant U.S. Attorney Matthew Diggs wrote in the sentencing memo. "Trademark holders also suffer more indirect harm, such as the damage to their reputation when the counterfeit products turn out to be low quality and faulty, as were the products sold by Ms. Rullan."

At the sentencing hearing, U.S. District Judge Ricardo S. Martinez noted that "there were many, many false statements to customs and to customers . . . there were many overt acts to keep this scheme going."

In fiscal year 2009, HSI's investigations into the sale of counterfeit goods resulted in the seizure of more than $62 million in pirated and counterfeit goods. The vast majority of the counterfeit goods seized come from China.

HSI manages the National Intellectual Property Rights Coordination Center (IPR Center), which plays a pivotal role in the U.S. government's domestic and international law enforcement attack on IPR violations. HSI agents and U.S. Customs and Border Protection (CBP) personnel throughout the country rely upon the IPR Center for guidance in their investigations and inspections.

The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting. The IPR Center offers one-stop shopping for both law enforcement and the private sector to address the growing transnational threat of counterfeit merchandise.

The IPR Center coordinates outreach to U.S. rights holders and conducts domestic and international law enforcement training to stem the growing counterfeiting threat and also directs anti-counterfeiting investigations.

To learn more about the IPR Center visit www.ice.gov. Report information on counterfeiting and trademark violations at (866) IPR-2060.

HSI was joined in this investigation by the Port of Seattle with assistance from CBP.