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Intellectual Property Rights

TOP STORY: 3 Orange County vendors charged with selling counterfeit goods

Cases are product of HSI's Operation Fashion Faux Pas

3 Orange County vendors charged with selling counterfeit goods
3 Orange County vendors charged with selling counterfeit goods

SANTA ANA, Calif. — The Orange County District Attorney's Office has filed felony charges against three local vendors identified during Operation Fashion Faux Pas, a crackdown by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) on Orange County retailers suspected of dealing in counterfeit designer goods.

Gokhan Kucuk, 33, who operates the Hot Trends kiosks in Huntington Beach, and John Giang Ly, 24, accused of selling high-end counterfeit purses out of his Westminster residence, were taken into custody Tuesday. The third defendant, Joon Heung Son, 45, owner of Shoe World stores in Garden Grove and Los Angeles, surrendered to the court Friday. All three defendants are charged in criminal complaints filed last week with multiple counts of manufacture and sale of a counterfeit mark.

According to the criminal complaints, both Kucuk and Ly have been previously convicted of state intellectual property violations. When HSI special agents executed a search warrant at Kucuk's three kiosks in November 2012, they seized hundreds of wallets, cell phone cases and jewelry bearing counterfeit trademarks for such designer brands as Burberry and Prada. That same month, a search of Ly's Westminster residence resulted in the recovery of phony designer purses purporting to be manufactured by Hermes, Louis Vuitton and Chanel. Meanwhile at the Garden Grove branch of Shoe World, special agents seized several dozen pairs of counterfeit footwear, including shoes bearing bogus Juicy Couture and Tory Burch labels. Investigators estimate the goods seized from the three vendors during the November searches would have retailed for close to $100,000 had the merchandise been genuine. HSI received assistance with the execution of the search warrants from the Huntington Beach, Westminster and Garden Grove police departments.

"People wrongly assume intellectual property theft is a victimless crime and there's no harm in buying counterfeit goods," said Claude Arnold, special agent in charge for HSI Los Angeles. "In fact, the vendors who sell counterfeit merchandise are robbing from legitimate companies, many of them U.S.-based, that make these products. And perhaps most important, they're hurting the men and women who depend on those companies for their livelihood."

With the filing of these latest criminal complaints, seven Orange County vendors have now been charged with state criminal violations as a result of Operation Fashion Faux Pas. Others charged include the suppliers and proprietors of Cobbler's Corner in Laguna Beach and the operators of Spa by Mode in Westminster. Over the course of enforcement action, investigators conducted a total of 18 warranted and consensual searches resulting in the seizure of more than $820,000 worth of counterfeit goods. That figure is based on the estimated retail value of the merchandise had it been genuine. The seized counterfeit goods included purses, jewelry, sunglasses, cosmetics and perfume.

Authorities point out this week marks the observance of World Intellectual Property Day, which occurs April 26 each year to recognize the importance of intellectual property in encouraging innovation and creativity. April 26 commemorates the day in 1970 that the World Intellectual Property Organization Convention came into being.

In fiscal year 2012, intellectual property rights enforcement by HSI and U.S. Customs and Border Protection led to more than 22,000 seizures with an estimated retail value of than $1.26 billion. That figure is based upon the suggested retail price had the products been genuine.

According to the International Anti-Counterfeiting Coalition, product counterfeiting costs U.S. businesses $200 to $250 billion a year in lost revenue.