HSI Seizes $100,000 of Counterfeit Goods

U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) seized more than $100,000 of counterfeit cosmetics, designer handbags and electronics after executing a search warrant at a Conway home Jan. 16, 2013. The U.S. Postal Inspection Service and the Conway Police Department assisted HSI with the investigation leading to the seizure.

"Counterfeit products cost law-abiding Americans their jobs and allow criminals to fund illegal activities with black market sales," said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. "Counterfeit cosmetics are a particular danger to the public because of the potential to ingest harmful substances that might be present in an unregulated product."

 Parmer oversees a five-state area of responsibility including Arkansas, Alabama, Louisiana, Mississippi and Tennessee.

HSI Little Rock began its investigation after receiving information from the U.S. Postal Inspection Service regarding multiple suspicious packages addressed to Vanchello Craig, 33, originating from overseas. On Oct. 22, HSI Little Rock subsequently found two parcels containing counterfeit items in Craig's home during a consensual search of the premises.

On Jan. 14, HSI Little Rock learned Craig was the recipient of another suspicious package. HSI conducted an inspection of the parcel pursuant to its border search authority and discovered additional counterfeit items destined for Craig.

ICE and CBP Join Forces with Mexican Government for Third Annual "Operation Holiday Hoax"

The National Intellectual Property Rights Coordination Center (IPR Center) recently announced the kickoff of Operation Holiday Hoax, an effort to track down those who are selling counterfeit and pirated products this holiday season.

The U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) –led IPR Center is working with partners U.S. Customs and Border Protection (CBP), the U.S. Postal Inspection Service, the Consumer Product Safety Commission, and the government of Mexico to target stores, flea markets and swap meets involved in the importation, distribution and selling of counterfeit and pirated products in cities across the United States and in Mexico. Additionally, CBP officers will be conducting inspections and seize counterfeit merchandise at various U.S. ports of entry.

"The counterfeiting and piracy epidemic continues to spread around the world," said IPR Center Director Lev Kubiak. "Our partnership with the government of Mexico and the rest of our partners at the IPR Center show that this is a problem that affects everyone in the world, not just the United States. Together, we will continue to deliver blow after blow to criminals worldwide making a positive impact on American jobs here at home."

This is the third year that the IPR Center has conducted Operation Holiday Hoax. Last year's operation led to the seizure of more than 327,000 counterfeit and pirated items with a manufacturer's suggested retail price worth an estimated $76.8 million. In 2009 the operation netted more than $26 million worth seized goods.

"The protection of intellectual property rights is one of CBP's top priority trade issues," said Assistant Commissioner for International Trade Al Gina. "Operations like this protect American businesses and consumers. CBP works daily to keep counterfeit goods out of the U.S. and to bring producers and distributors of these goods to justice."

Last year, Mexico's Tax Administration Service conducted 845 inspections in the main ports of entry, executed 160 search warrants nationwide and seized 23.8 million counterfeit and pirated items including 10 tons of used clothing, cigarettes, electronics, tools and DVD's. The estimated value of the seized goods was 96.7 million pesos, or $7.1 million.

Holiday Hoax began Nov. 26 and is scheduled to run until Dec. 26. During that time federal and local law enforcement officers will seize products such as perfume, holiday lights, electronics, clothing and DVD's. As in years past, most of these items are ordered online as part of the holiday shopping season.

The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. 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 IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

Members of Internet Piracy Group Sentenced

Two members of the Internet piracy group "IMAGiNE" were sentenced to prison Friday, November 2, 2012, in Virginia, following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Willie Lambert, 57, of Pittston, Pa., was sentenced to 30 months in prison, three years of supervised release and $449,514 in restitution, and Sean M. Lovelady, 28, of Pomona, Calif., was sentenced to 23 months in prison, three years of supervised release and $7,500 in restitution.

Lambert and Lovelady were indicted along with two other defendants April 18 for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release to the Internet copies of movies only showing in theaters.

Lambert and Lovelady each pleaded guilty to one count of conspiracy to commit criminal copyright infringement.

According to court documents, Lambert, Lovelady and their co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Both Lambert and Lovelady admitted that they went to movie theaters and secretly used receivers and recording devices to capture the audio sound tracks of copyrighted movies, referred to as "capping."

After obtaining, editing and filtering audio sound tracks and uploading them to servers used by the IMAGiNE Group, Lambert and Lovelady used and attempted to use software to synchronize the audio file with an illegally obtained video file to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others.

Co-defendants Jeramiah B. Perkins and Gregory Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement. Perkins is scheduled to be sentenced Jan. 3, 2013, and Cherwonik is scheduled to be sentenced Nov. 29.

Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Justice Department Criminal Division's Computer Crime and Intellectual Property Section are prosecuting the case. Significant assistance was provided by the Justice Department's Cyber Crime Lab and the Criminal Division's Office of International Affairs.

This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.

5 Plead Guilty to Counterfeit Trade and Intellectual Property Theft Conspiracy

Five individuals have pleaded guilty to conspiring to import misclassified merchandise. Each faces up to five years in federal prison and a $250,000 fine. This case is being investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

"The trademark laws in the United States were created to protect the investment of American manufacturers such as Nike as well as consumers," said U.S. Attorney William J. Hochul Jr., Western District of New York. "These laws are designed to create a level playing field for businesses and protect consumers who might unwittingly purchase inferior counterfeit goods. Our office will continue to aggressively enforce customs laws for the benefit of American businesses and those who purchase their products."

"Selling counterfeit goods is stealing," said James C. Spero, special agent in charge of HSI Buffalo. "HSI is committed to ensuring the legitimate copyright holders are protected from individuals who are only motivated by greed. People and organizations which produce and sell counterfeit products undermine the U.S. economy; create inferior and sometimes dangerous products; and jeopardize public safety."

Xiao Cheng Lin, 50, and his wife, Ling Zhen Hu, 51, both of New York, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to import misclassified merchandise. Hu, a native of China, worked for an individual who imported thousands of pairs of sneakers from China that bore the Nike "swoosh" logo and Nike labeling, but were not genuine Nike sneakers. Hu then negotiated the sale of large quantities of the mislabeled sneakers to Malik Bazzi, 44, of Montreal, who then sold them to customers throughout the United States - including in Buffalo - via his warehouses in Manhattan and Brooklyn. Bazzi is currently scheduled to be sentenced Feb. 1, 2013. Hu admitted that she negotiated the sale of 7,500 pairs of sneakers to Bazzi.

Lin, also a native of China, worked with his wife, delivering the 7,500 pairs of sneakers to Bazzi. The HSI investigation revealed that Bazzi's customers then sold the counterfeit Nike sneakers on the street and in retail stores to customers for about half the price of genuine Nike sneakers.

As part of their plea agreements, both Lin and Hu agreed to abandon any claim to more than $600,000 and dozens of pairs of counterfeit sneakers seized from their New York residence following their 2007 arrest.

The defendants were arrested along with 21 others. To date, 20 of the defendants have been convicted.

On Sept. 5, 2012, LaKeith Fowler, 32, of Dallas, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Fowler, one of Bazzi's customers, purchased and sold approximately 12,000 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Fowler sold the sneakers in a retail store he owned in the Dallas-area. As part of his plea agreement, Fowler agreed to forfeit two bank accounts to the government which contain over $44,000 in deposits. The accounts were used to conduct counterfeit sneaker transactions.

On Sept. 7, 2012, Davion Briant, 37, of Milwaukee, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Briant, another of Bazzi's customers, purchased and sold approximately 4,500 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Briant owned a retail store in the Milwaukee-area where he sold the counterfeit sneakers.

On Sept. 10, 2012, Hussien Sara, 30, of New York, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Sara worked in Bazzi's warehouses where, on behalf of Bazzi, he took delivery of over 13,000 pairs of counterfeit sneakers from several suppliers, including Hu and Lin. In addition, Sara assisted in packaging the sneakers for shipment to Bazzi's customers located throughout the United States.

Lin and Hu will be sentenced Jan. 24, 2013; Fowler Dec. 14, 2012; Briant Jan. 7, 2013; and Sara Jan. 11, 2013. All will be sentenced by Judge Arcara in Buffalo.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting/piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

Assistant U.S. Attorney John E. Rogowski, Western District of New York, is prosecuting this case on behalf of the U.S. government.

New York Man Sentenced for Prescription Drug Trade

An upstate New York man was sentenced Wednesday, May 16, to three years probation and ordered to pay restitution in the amount of $13,377 for importing counterfeit Viagra and Cialis tablets into the United States. This investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the U.S. Food and Drug Administration (FDA).

According to court documents, between January and June 2011, Curtis Henry, 53, of Rochester, ordered more than 700 counterfeit Viagra and Cialis tablets from a source in China. After receiving the counterfeit pharmaceutical tablets, Henry sold them in Rochester. Henry was sentenced by U.S. District Judge Charles J. Siragusa after he pleaded guilty to the charge Nov. 2, 2011.

"Counterfeit drugs pose a serious threat to public health and safety, and those who engage in this illicit practice have no concern for the well-being of people's lives," said James Spero, special agent in charge of HSI Buffalo, N.Y. "People who purchase drugs should never have to put their lives at risk because the product is fake, unsafe or untested. Homeland Security Investigations and our law enforcement partners in New York will continue to work diligently to make sure counterfeit products stay off of our streets."

"This investigation again demonstrates the commitment of FDA's Office of Criminal Investigations to aggressively pursue those who distribute counterfeit prescription drugs and who greedily place at risk the health and safety of consumers to line their pockets," said Mark Dragonetti, special agent in charge of the FDA, Office of Criminal Investigations, New York Field Office. "I would like to commend the U.S. attorney's office and our joint law enforcement partners at Homeland Security Investigations in our continued efforts in combating counterfeit drugs."

As the largest investigative arm of the U.S. Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off the streets, but also on dismantling the criminal organizations behind such illicit activity.

HSI manages the National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP (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.

IPR Center Announces New Intellectual Theft Warnings

The National Intellectual Property Rights Coordination Center (IPR Center), led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), has joined together with the FBI and six major American movie studios to launch an updated anti-piracy warning to be displayed on new releases. The anti-piracy warning will begin appearing in selected DVDs and Blu-rays released this week. The six movie studios, all members of the Motion Picture Association of America, have agreed to utilize the anti-piracy warning.

The joint FBI/HSI anti-piracy warning displays, for the first time, the HSI badge alongside the FBI anti-piracy warning seal and states that, "The unauthorized reproduction or distribution of this copyrighted work is illegal. Criminal copyright infringement is investigated by federal law enforcement agencies and is punishable by up to 5 years in prison and a fine of $250,000." A second screen displays the IPR Center logo with the educational message, "Piracy is not a victimless crime. For more information on how digital theft harms the economy, please visit www.iprcenter.gov."

"Our nation's film and TV business is critical to our economy," said ICE Director John Morton. "Its creativity and imagination have made American entertainment one of our greatest exports over the decades, but criminals are increasingly engaging in new forms of digital theft. Law enforcement must continue to expand how it combats criminal activity; public awareness and education are a critical part of that effort."

The IPR Center works closely with public and private entities to increase awareness and information sharing about the harmful effects of piracy on American innovation, lost jobs and the economy. The IPR Center also brings attention to the organized criminal enterprises often behind IP theft and the public safety implications of counterfeit goods.

In June 2010, HSI launched Operation In Our Sites, which targets online commercial intellectual property crime, including websites offering pirated movies and television shows as well as a diverse array of counterfeit goods, such as sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, more than 760 domain names of websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites. Eleven individuals have been charged with crimes or arrested, and more than $1 million has been seized as criminal proceeds.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit and pirated products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.