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Intellectual Property Rights and Commercial Fraud


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Maryland US Attorney's Office highlights recent HSI cases in recognition of annual world intellectual property day

BALTIMORE — According to officials at the U.S. Attorney's Office in Maryland, the growing role of the Internet has dramatically enhanced the opportunities for criminals around the world to sell products that do not belong to them, depriving the legitimate owners of any profit. Intellectual property theft – whether involving counterfeit medicines, network hardware, pirated content or trade secrets – threatens our nation's economy, can endanger public health and safety and can even undermine our national security.

April 26 is the 13th Annual World Intellectual Property Day, designated to increase public awareness about the role of intellectual property rights in promoting innovation and creativity.

U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) works with the Maryland US Attorney's Office and other federal, state and local partners to enforce intellectual property rights.

Some of the highlights from the past year involving HSI Baltimore investigations are:

Trafficking in Counterfeit Goods

  • In January, Liang Lin, pleaded guilty to trafficking in counterfeit goods. Lin owned and operated two shops on the boardwalk in Ocean City, Md., where he sold counterfeit merchandise, including purses, handbags, shirts, jewelry, perfume, hats, and shoes that bore trademarks such as Michael Kors, Nike, Monster, Coach, Gucci, Versace, Vera Wang, Louis Vuitton and Chanel. HSI special agents made several seizures of counterfeit trademarked merchandise from Lin and his stores. The retail value of the counterfeit trademarked merchandise seized from and sold by Lin is 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 is scheduled for sentencing July 10.
  • Jerold Lee Sharoff has been indicted for conspiring and trafficking in counterfeit goods and counterfeit labels. Sharoff operated Beachwear Outlet and Surf Beachwear, both on Atlantic Avenue in Ocean City, where the indictment alleges that he sold counterfeit trademarked merchandise. Sharoff also allegedly stored counterfeit goods at a warehouse located in Ocean City. Further, the indictment alleges that Sharoff and his co-conspirators manufactured counterfeit t-shirts by applying heat transfers bearing counterfeit trademarks to t-shirts using heat presses. Sharoff is scheduled to go to trial Oct. 21.
  • Several other defendants have pleaded guilty to trafficking in trademarked counterfeit goods, including counterfeits of Nike, Coach, Gucci, Versace, Louis Vuitton, Chanel, Michael Kors, Jimmy Choo, Tory Burch, Juicy, Prada, Christian Dior, Ed Hardy, Burberry and Dolce & Gabbana, with losses to the companies estimated at between $10,000 and $30,000. Keith Jackson pleaded guilty to selling counterfeit purses, handbags and watches. He was arrested three times for selling counterfeit goods before being charged federally. He is scheduled to be sentenced June 12. Co-defendants Philip Swaby and Yoncra Robinson pleaded guilty to operating a store in Baltimore called Fashion Trendz, where they sold counterfeit purses, watches, jewelry, glasses, wallets and scarves. They are scheduled to be sentenced June 5. Tidiane Ba was sentenced to eight months in prison and ordered to pay $1,000 in restitution, and Baba Toure was sentenced to one year probation, after they pleaded guilty to selling counterfeit purses, handbags, shoes, watches, hats and other items by luxury manufacturers at locations around Baltimore, including at the Patapsco Flea Market. They rented storage units to store counterfeit trademarked merchandise received from suppliers in New York. HSI agents seized counterfeit goods from the defendants on several occasions during the course of the investigation. Charges against three co-defendants are pending.

Copyright Infringement

  • Naveed Sheikh, 32, of Baltimore, pleaded guilty to conspiring to and infringing copyrights by illegally reproducing and distributing more than 1,000 copyrighted commercial software programs, with a value of more than $4 million. Sheikh created multiple websites through which the infringing software was sold. Sheikh did not report the income from the copyright infringement scheme on his tax returns. As part of his plea agreement, Sheikh will be required to forfeit $4 million. Sentencing is scheduled May 15.

Website Seizures

  • In 2012, HSI Baltimore special agents working with the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) and the U.S. Attorney's Office seized and shut down websites selling counterfeit items.
  • For example, in October 2012 nearly 700 U.S. based websites selling trademarked counterfeit pharmaceutical drugs were seized and shut down. The drugs being offered for sale on the websites included anti-cancer medications, drugs to treat depression and dementia, drugs to reduce the risk of heart attack and stroke, weight loss and food supplements, and erectile dysfunction pills. Analyses of trademarked counterfeit pharmaceutical drugs purchased from the websites revealed that the drugs were generally shipped from outside the United States and were not authentic, nor approved by the Food and Drug Administration for sale in the United States. The operation, known as Bitter Pill, was part of an international initiative that spanned 100 countries and confiscated more than three million doses of counterfeit medications worth approximately $10.5 million.
  • In June 2012, HSI special agents seized two domain names and three PayPal accounts in connection with a scheme to sell fraudulent store and rewards coupons. The Sderclub.com and its related domain name, ccccpn.com, offered online sales of store and rewards coupons, also known as "rewards checks" from Staples, Inc. Website operators created compromised and fraudulent coupons using coupon codes legitimately issued by Staples for use by Staples Rewards customers. The fraudulent coupons purchased from sderclub.com or ccccpn.com expired within a couple of days in order to be used by the purchaser before the legitimate Staples customer, to whom the coupon was issued, redeemed it. From Jan. 13, 2009 through May 15, 2012, more than 102,553 transactions pertaining to the sale of fraudulent store and/or rewards coupons occurred on the three seized PayPal accounts, each of which was created by an individual residing in China.

"These cases are excellent examples of the tremendous partnership HSI Baltimore and the Maryland US Attorney's Office has forged in the name of intellectual property theft enforcement," said HSI Baltimore Special Agent in Charge William Winter. "In addition to seizing counterfeit goods and the websites that sell counterfeit merchandise and prescription drugs that pose public safety threats, we must work with our international partners to shut down the criminal organizations producing these goods around the world."

HSI manages the IPR Center in Washington, one of the U.S. government's key weapons in the fight against counterfeiting, piracy, and commercial trade fraud. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters. To report IP theft or to learn more about the HSI-led IPR Center, visit www.IPRCenter.gov.

These cases are part of the 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 https://www.justice.gov/iptf.


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Last Reviewed/Updated: 04/16/2019