The guilty plea follows an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
"Entrepreneurs are free to sell cheap clothing, shoes, handbags, perfume and other consumer items," said U.S. Attorney Rod J. Rosenstein. "But they cannot use someone else's trademark."
"Counterfeit goods traffickers like Lin are looking to gain profit but in reality are committing a crime that results in American jobs lost, American business profits stolen and American consumers receiving substandard products," said Special Agent in Charge of HSI Baltimore William Winter. "Consumers now pay more for legitimate products to make up for the money being lost to counterfeits. HSI enforcement operations into intellectual property theft protect not only the companies who have copyrighted products, but the consumers who believe they are legitimately buying those copyrighted products."
According to his plea agreement, Lin owned and operated two stores in Ocean City: Hot Topik at 401 South Atlantic Avenue and Everything $5.99 and Up at 806 South Atlantic Avenue #8, as well as operating stores in Delaware. Lin admitted that from at least June 2010 through at least September 2011, he sold and attempted to sell counterfeit merchandise, including purses, handbags, shirts, jewelry, perfume, hats and shoes that bore trademarks such as Chanel, Coach, Gucci, Louis Vuitton, Michael Kors, Monster, Nike, Versace and Vera Wang.
During the summer of 2011, undercover investigators observed large quantities of counterfeit merchandise in Lin's stores in Ocean City, and several undercover buys of counterfeit merchandise were made, including the purchase of a counterfeit Coach purse.
On the morning of Aug. 17, 2011, HSI special agents executed federal search warrants at both of Lin's stores in Ocean City and approximately 8,000 items of counterfeit merchandise were seized. Two days after the execution of the federal search warrant, an investigator again saw counterfeit merchandise for sale at Everything $5.99 and Up, including merchandise of the same type seized during the search. On Sept. 1, 2011, an investigator made an undercover buy of a counterfeit Coach purse at Everything $5.99 and Up.
On Jan. 30, 2012, Lin was stopped re-entering the United States after a one-day trip to Canada and declared that the only thing he purchased in Canada was liquor from a duty free shop. A border search of his vehicle recovered approximately 869 pieces of counterfeit jewelry bearing trademarks such as Chanel.
It is estimated by the manufacturers whose goods were counterfeited that the lost retail value (or the retail value of the infringed items) of the goods seized and sold is estimated to be between $200,000 and $400,000. The estimated retail value of the counterfeit merchandise, based on what Lin was selling the infringing counterfeit items for is $153,585.
Lin faces a maximum sentence of 10 years in prison and a fine of $2 million at his sentencing March 27 at 9:30 a.m.
Today's law enforcement action is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation's economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to http://www.justice.gov/dag/iptaskforce/.
The investigation was conducted by HSI Baltimore and Ocean City, the Maryland State Police and Ocean City Police Department. Blazer Investigations and Stumar Investigations assisted in the investigation.
The case was prosecuted by Assistant U.S. Attorney Justin Herring.