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August 16, 2018New York, NY, United StatesIntellectual Property Rights and Commercial Fraud

33 charged in half a billion dollar smuggling scheme of counterfeit luxury goods

Defendants trafficked items that included fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume

NEW YORK — 33 individuals were charged Thursday following an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) into a scheme to illegally bring into the United States millions of dollars of Chinese-manufactured goods by smuggling them through ports of entry on the East and West Coasts.  One defendant is also charged with unlawful procurement of naturalization.  

The charges include conspiracy to traffic, and trafficking, in counterfeit goods; conspiracy to smuggle, and smuggling, counterfeit goods into the United States; money laundering conspiracy; immigration fraud and unlawful procurement of naturalization.  In addition, the government restrained nine real properties in Queens, Staten Island and Brooklyn, New York belonging to the defendants.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Special Agent in Charge Angel M. Melendez of HSI New York and Commissioner James P. O’Neill of the New York City Police Department (NYPD), announced the charges. Charges were also announced in a related state case being prosecuted by the Queens District Attorney’s Office.

“This investigation exposed the global nature of intellectual property crimes, allegedly being executed by those arrested today.  Counterfeit goods manufactured and smuggled from China with a suggested value close to half a billion dollars, were intended to make its way into U.S. markets and into the hands of unsuspecting consumers,” said HSI Special Agent-in-Charge Melendez.  “This investigation should be a crystal clear message that counterfeiting and intellectual property rights violations is anything but a victimless crime as it harms legitimate businesses, consumers and governments.”

“The defendants allegedly smuggled millions of dollars of counterfeit luxury goods into our country, depriving companies of their valuable and hard-earned intellectual property,” said Assistant Attorney General Benczkowski.  “The illegal smuggling of counterfeit goods poses a real threat to honest businesses, and I commend our federal prosecutors and partners at HSI and the NYPD for their outstanding work on this important investigation.  The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”

“As alleged, the defendants used many forms of deception to smuggle large quantities of counterfeit luxury brand goods from China into the United States, and then profited by distributing and selling the fake merchandise,” said U.S. Attorney Donoghue.  “This Office, working with our law enforcement partners, is committed to securing our country’s ports of entry, as well as to protecting the integrity of intellectual property upon which free and fair international trade and markets depend.”           

According to the court filings, the defendants played various roles in the trafficking of counterfeit goods manufactured in China, brought by ocean-going ships to the United States in 40-foot shipping containers, smuggled through ports of entry disguised as legitimate imports and distributed throughout the country.  The counterfeit goods included items such as fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume.  The defendants’ roles included:

The charges in the indictments and criminal complaint are allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The investigation was conducted by HSI Intellectual Property Group and HSI Border Enforcement Security Task Force and the NYPD Border Security Enforcement Task Force.  Assistance was provided by U.S. Customs and Border Protection, the New York State Police and the Brooklyn District Attorney’s Office.  The government’s cases are being prosecuted by Senior Counsel James S. Yoon of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Assistant U.S. Attorneys William P. Campos and Temidayo Aganga-Williams of the Eastern District of New York and Special Assistant U.S. Attorney Robert Kaftal of the Brooklyn District Attorney’s Office.  Assistant U.S. Attorney Claire S. Kedeshian is handling the forfeiture aspect of this case.  The investigation was previously led by Senior Counsel Evan Williams of CCIPS.

The Department of Justice’s Task Force on Intellectual Property (IP Task Force) contributed to this case.  The IP Task Force is led by the Deputy Attorney General to combat the growing number of domestic and intellectual property crimes, to protect the health and safety of American consumers and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work.