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June 22, 2016Sacramento, CA, United StatesIntellectual Property Rights and Commercial Fraud

Large quantities of counterfeit apparel and illegal foreign pharmaceuticals seized in Sacramento-area searches

SACRAMENTO, Calif. – Federal and state investigators on the California Attorney General’s Tax Recovery and Criminal Enforcement (TRaCE) Task Force seized hundreds of boxes of illegal foreign pharmaceuticals and suspected counterfeit clothing Tuesday during the execution of seven search warrants in the Sacramento area.

Tuesday’s enforcement actions were carried out by more than 50 special agents and investigators from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the California Department of Public Health’s Food and Drug Branch; the California Franchise Tax Board; and the California Department of Justice eCrime Unit.

“The trafficking of counterfeit goods poses a triple threat,” said Ryan Spradlin, the special agent in charge who oversees HSI operations throughout northern California. “Such activities deliver shoddy and often dangerous goods into the economy, rob Americans of good-paying jobs, and generate proceeds that are often funneled back into other criminal enterprises. HSI will continue to work with its enforcement partners to combat the distribution of counterfeit products, like those seized in Sacramento yesterday, that could put unwitting consumers at risk.”

The enforcement actions follow a months’ long probe into the suspected sale of illegal foreign prescription medications, over-the-counter pharmaceuticals, and counterfeit clothing by an area couple and their adult son. Inside the family’s homes and three area businesses – Fashion Moda in North Highlands, Victoria’s Health Products in Citrus Heights, and Elena’s Health Products in West Sacramento – investigators discovered and confiscated foreign pharmaceuticals, clothing, and more than $10,000 in cash.

“This action was a big blow to the underground economy in northern California, and that makes this a win for our whole state,” said Board of Equalization Chairwoman Fiona Ma, whose district includes West Sacramento, one of the communities where the searches occurred. “I want to thank the hardworking agents and investigators who spent months of painstaking work in shutting down these illegal operations.”

“Illegal activities hurt legitimate businesses and inflict unfair costs on law-abiding Californians,” said George Runner, a member of the Board of Equalization. “Law enforcement deserves a huge thank-you for their ongoing efforts to fight the underground economy.”

The Tax Recovery and Criminal Enforcement Task Force (TRaCE) is made up of investigators from multiple agencies, including the California Department of Justice, Board of Equalization; the Franchise Tax Board; the Department of Alcoholic Beverage Control; the Employment Development Department; the Department of Motor Vehicles; HSI; the FBI; and the Santa Ana Police Department.

The mission of the TRaCE Task Force is to combat organized elements of the underground economy engaged in the manufacture, importation, distribution, and sale of pirated intellectual property, and other economic crimes resulting in the evasion of business, payroll and/or income taxes.

Last fiscal year, CBP and HSI made more than 28,000 seizures involving counterfeit goods with an estimated value of almost $1.4 billion. The International Anti-counterfeiting Counterfeiting Coalition estimates intellectual property crime costs U.S. businesses $200 to $250 billion a year in lost revenues.

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