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Intellectual Property Rights

South Texas business owner sentenced to 18 months in federal prison for selling counterfeit merchandise

Also ordered to pay more than $400,000 in restitution to the trademark holders he counterfeited

LAREDO, Texas — A Laredo merchant was sentenced Tuesday to 1 ½ years in federal prison for trafficking in counterfeit goods, and was also ordered to pay more than $400,000 in restitution to the trademark holders.

This sentence was announced by U.S. Attorney Kenneth Magidson, Southern District of Texas. This investigation was conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).

Yi Hui Chen, 47, a merchant in downtown Laredo, pleaded guilty to the counterfeiting charges May 16, 2013. U.S. District Judge Marina Garcia Marmolejo accepted Chen's guilty plea and sentenced him to 18 months in federal prison. The judge also ordered Chen to pay restitution to the trademark holders in the following amounts based on the total retail value of the items seized: $265,836 to Coach, $80,324.23 to Tory Burch, $39,943.33 to Louis Vitton, $35,675 to Gucci, $5,343 to Burberry, $826.23 to Nike and $290 to Prada.

"Intellectual property theft is not a victimless crime and should concern every American," said Special Agent in Charge Janice Ayala, HSI San Antonio. "Enforcing our nation's counterfeiting laws protects our economy, shields unwitting consumer from sub-par and/or unsafe merchandise, and upholds the intellectual property rights of those who play by the rules."

Chen, a U.S. permanent resident from Taiwan, was the owner of J Design located in downtown Laredo. He is expected to face deportation proceedings after he's released from prison.

According to court documents, HSI special agents met with Chen and conducted undercover buys of counterfeits goods at Chen's place of business. During the course of the investigation, HSI special agents seized 5,722 counterfeit items, including: numerous styles and brands of handbags, wallets, hats, sunglasses, shirts and luggage. The counterfeited brand names included: Burberry, Cartier, Chanel, Chi, Coach, Dooney and Bourke, Gucci, Hermes, Jimmy Choo, Louis Vuitton, Michael Kors, Nike, Oakley, Polo, Prada, Rayban, Rolex, Tory Burch and Dolce & Gabanna.

Former Assistant U.S. Attorney Roel Canales, and Assistant U.S. Attorney, Shawn Coker, both of the Southern District of Texas, prosecuted this case.