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Intellectual Property Rights

Southeast Texas man pleads guilty to trafficking counterfeit goods

HOUSTON — A southeast Texas man pleaded guilty Thursday to conspiring to traffic in counterfeit CHI hair care products, announced U.S. Attorney Kenneth Magidson, Southern District of Texas. This investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Eric White, 52, from Spring, Texas, and an Internet seller of hair care products, admitted he imported and resold counterfeit CHI hair irons from April to September 2010. CHI curling irons are manufactured by Farouk Systems, a Houston-based company that sells hair care products through authorized distributors.

White, using the company name Royal Cosmo, was contacted in April 2010 by counsel for Farouk Systems. White was given a certified cease-and-desist letter notifying him that they had learned he was selling counterfeit CHI irons on the Internet. The letter also informed him of the penalties for trademark infringement.

After the April 2010 cease-and-desist letter, White continued to illegally import counterfeit CHI products from China. On three occasions, U.S. Customs and Border Protection (CBP) agents seized a package of counterfeit CHI products. On each occasion, agents mailed White a letter notifying him of the seizures and stating the products were determined to be counterfeit.

Pursuant to a search warrant, HSI special agents obtained emails from White's account. Those emails illustrated that after the cease-and-desist letters and CBP seizures, White and his Chinese suppliers discussed using different shipping carriers, delivery names and addresses in an effort to avoid customs. In September 2010, HSI executed a search warrant at White's home and seized 154 CHI hair irons. Subsequent analysis determined that 147 of the 154 were counterfeit.

U.S. District Judge Gray Miller, who accepted White's guilty plea, has set sentencing for Oct. 19. White faces up to five years in prison and a maximum $250,000 fine. He remains on bond pending sentencing.

Assistant U.S. Attorney Martha Minn, Southern District of Texas, is prosecuting the case.