Puerto Rican National Sentenced for Distributing Counterfeit Pharmaceuticals

A Puerto Rican man was sentenced Monday, January 28, 2013, to two years in federal prison for being a key member of an organization that distributed large quantities of Chinese-made, counterfeit pharmaceuticals across the United States.

Francis Ortiz Gonzalez, 36, was sentenced the morning of Monday, January 28, 2013, by U.S. District Judge George H. Wu, who also ordered the defendant to pay $324,530 in restitution to the pharmaceutical companies that manufacture brand name products such as Lipitor, Viagra, Xanax and Cialis.

The case is the result of investigations by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI); the Food and Drug Administration, Office of Criminal Investigations; and the U.S. Postal Inspection Service.

In September 2009, federal agents executed a search warrant at Ortiz Gonzalez's residence in Trujillo Alto, a suburb of San Juan, Puerto Rico. Inside the home, investigators found more than 100,000 pills that resembled a variety of popular prescription medications made by companies such as Pfizer Inc. and Eli Lilly and Company. Investigators found evidence that Ortiz Gonzalez obtained the counterfeit pills from China and had shipped more than 140,000 of them to individuals throughout the United States. If the drugs had been authentic, the retail value of the pills Ortiz Gonzalez possessed in his home and shipped would be more than $1 million.

Following a six-day trial last summer, Ortiz Gonzalez was convicted on one count of conspiracy and seven counts of trafficking in counterfeit pharmaceuticals. Ortiz Gonzalez was acquitted on three charges. His wife, Ideliz Aleman-Valentin, was acquitted on all charges.

Ortiz Gonzalez packaged and shipped more than 140,000 counterfeit tablets during a seven-month period in 2009 while working as a "dropshipper" for a counterfeit drug ring allegedly headed by Bo Jiang, 34, a Chinese national whose last known residence was in New Zealand. In January 2011, Jiang was taken into custody on a provisional arrest warrant by New Zealand law enforcement authorities, but he fled shortly after being released on bond. Jiang remains a fugitive.
In a related case before Judge Wu, a North Hollywood man was found guilty on January 11 of federal charges involving the trafficking of counterfeit pharmaceuticals.

Edward Alarcon, 44, was convicted of two counts of trafficking in counterfeit OxyContin and Cialis; he was acquitted on two other counts. The evidence presented during a three-day jury trial showed that Alarcon had purchased the counterfeit OxyContin from Bo Jiang, the same man who allegedly supplied Ortiz Gonzalez.

On Nov. 10, 2009, HSI special agents found approximately 237 counterfeit OxyContin pills and approximately 1,592 counterfeit Cialis pills in Alarcon's car and house. Investigators also found hundreds of other counterfeit pills, including Viagra and Levitra. Only a month before the federal search, Alarcon had been convicted in state court on counterfeit drug charges for selling counterfeit Cialis to an undercover Los Angeles Police Department officer in 2008.

Alarcon is scheduled to be sentenced by Judge Wu April 4. At that time, Alarcon faces a statutory maximum sentence of 20 years in federal prison.

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.

Life Sentence for JFK Baggage Handler who Ran Drug Trafficking Ring

A former American Airlines baggage handler was sentenced to life in prison Tuesday, October 16, 2012, for his leadership of an international drug trafficking organization. This sentencing comes as a result of an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), U.S. Customs and Border Protection, the Port Authority (of New York & New Jersey) Police Department, the Internal Revenue Service, the United States Postal Inspection Service, and the Drug Enforcement Administration.

"Victor Bourne and his crew of corrupt former American Airline employees mistakenly viewed drug smuggling as a path to riches. The sentencing today serves as a stern warning about the consequences awaiting drug smugglers," said James T. Hayes Jr., special agent in charge of HSI New York. "HSI will continue to use its resources and the expertise of its law enforcement partners to flush out criminals who attempt to exploit our borders."

"Using his insider status, Bourne turned American Airlines into his personal narcotics shuttle service, running a criminal organization that ignored passenger safety and security in the pursuit of their greater goal - enriching Victor Bourne," said Loretta E. Lynch, U.S. attorney of the Eastern District of New York. "Bourne not only abused the trust of American Airlines to satisfy his own financial greed, but by compromising security at JFK Airport he placed all travelers at risk. In this post-9/11 era, we will continue to aggressively investigate and prosecute those at our ports of entry who violate our nation's drug trafficking laws and threaten the integrity of our borders."

Victor D'Costa Bourne, 37, was the leader of an international drug trafficking organization that smuggled narcotics from the Caribbean into the United States through John F. Kennedy International Airport (JFK). A federal jury in Brooklyn returned guilty verdicts against Bourne on charges of leading a continuing criminal enterprise, importing and distributing illegal narcotics, and money laundering, after a month-long trial in October 2011.

In total, the investigation that culminated in Bourne's conviction and sentence has resulted in 20 convictions, including the conviction of 19 airline employees, the seizure of 13 kilograms of cocaine and 2,900 pounds of marijuana, and the forfeiture of $6.9 million.

The evidence at trial proved that, between 2000 and 2009, the Bourne organization utilized corrupt employees of commercial airlines, including American Airlines, working at domestic and international ports of entry to smuggle illegal narcotics into the U.S. and throughout the Caribbean. Bourne paid dispatching crew chiefs at American Airlines to assign crews of baggage handlers, who, in turn, were paid tens of thousands of dollars by the Bourne organization to retrieve the cocaine from the flights upon arrival.

The cocaine smuggled aboard American Airlines flights into JFK was hidden behind panels in the front and rear cargo holds, the ceiling, wing assembly, avionics, and other vital equipment compartments. After removing the cocaine from these locations, the corrupt baggage handlers hid the drugs inside their coats and airline equipment bags to avoid detection by law enforcement and safely transport the drugs to Bourne.

The government proved at trial that, in this manner, the Bourne organization was responsible for the importation into the U.S. of over 150 kilograms of cocaine. At the time of his arrest in 2009, Bourne was preparing to transport even larger quantities of cocaine in cargo containers from the Caribbean to the United States.

The evidence presented by the government at trial included testimony from six former American Airlines employees who pleaded guilty to narcotics trafficking charges resulting from their participation in the Bourne organization. Each witness described Bourne's control of the drug smuggling operation, including the recruitment and payment of his workers, the secret locations on the aircraft where the cocaine was hidden, and the growth of the organization over time. One of the employees recounted a conversation in which Bourne stated, in substance, that he "started with half a kilo, then got 1, 2, 3, 4, 5, 30, 50."

Another government witness, an American Airlines employee at JFK who was not involved in drug trafficking, testified that Bourne accused him of stealing two kilograms of cocaine. This witness testified that Bourne threatened to "kill me, my family, my kids" if the drugs were not returned. Shortly thereafter, Bourne confronted the same employee at the airport and pushed him off of a truck, causing a neck injury.

The evidence at trial also established that Bourne was responsible for the shipment of over 5,000 pounds of marijuana aboard cargo vessels, in part through a Brooklyn footwear company, to businesses in Barbados.

Bourne reaped millions of dollars in illegal cash proceeds from his illegal drug trafficking, and laundered his drug proceeds through businesses and real estate ventures in Brooklyn and Barbados.

In addition to a lifetime term of imprisonment, Bourne was ordered to forfeit $5.1 million.

Two Illinois Women Sentenced for Counterfeit Luxury Ring

Two women were sentenced in federal court Monday, August 13, 2012, for conspiring to traffic counterfeit merchandise in the Rockford, Ill., area. The sentences resulted from a joint investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Bloomington Police Department, and the U.S. Postal Inspection Service.

Jannette Grant, 51, of Bloomington, Ill., and Kimberly Nein, 50, of Argenta, Ill., who did business as "The Purse Lady," were sentenced Aug. 13 for trafficking in counterfeit goods. U.S. District Judge Joe Billy McDade, Central District of Illinois, sentenced Grant to 36 months in federal prison; and sentenced Nein to serve 24 months in federal prison. Both women were ordered to pay $3,879 restitution. They will report to the Bureau of Prisons Oct. 9 to begin serving their respective prison terms.

On April 25, Grant and Nein each waived indictment and pleaded guilty to operating a business known as "The Purse Lady" that sold counterfeit items bearing various trademarks, including: Coach, Kate Spade, Dolce & Gabbana, Chanel, Dooney & Bourke, Prada, Tiffany & Co., and others. Goods were sold throughout central Illinois, including at various businesses, home parties, also known as "purse parties," through the mail, and at an Argenta warehouse owned by Nein.

Grant and Nein admitted they regularly traveled to Chicago and New York to purchase inventory. According to court documents, Grant and Nein advertised their items for sale as "replica/knockoff," and stated that all references to brands were for "entertainment and novelty purposes only," and "these companies are not affiliated with us in any way."

During search warrants executed by law enforcement officers May 12 at Grant's home and at Nein's Argenta warehouse, officers recovered more than 15,000 counterfeit items with a total estimated manufacturer's suggested retail price of about $1.6 million. The seized luxury goods included 2,000 purses, 900 wallets, 400 sunglasses, 10,900 emblems and medallions, and other items.

Officers recovered various items that Grant surrendered, including a 2008 Dodge Caravan, a 2003 BMW, and $18,052 in currency at her home. Officers also recovered $4,487 from the business's bank account and $80,000 held in a safe deposit box. Grant previously agreed to forfeit $47,522, the amount Grant had paid on two homes in Bloomington, Ill., in lieu of forfeiting real estate.

Assistant U.S. Attorney Darilynn J. Knauss, Central District of Illinois, prosecuted this case.

Puerto Rican Man Faces Ten Year Sentence for Distribution of Counterfeit Pharmaceuticals

A Puerto Rican man faces up to 10 years in prison after being found guilty by a jury the week ending in August 10, 2012, on federal charges stemming from his role as a key operative for a drug ring that distributed large quantities of Chinese-made counterfeit pharmaceuticals throughout the United States and worldwide.

Francis Ortiz Gonzalez, 36, was convicted following a six-day trial on one count of conspiracy and seven counts of trafficking in counterfeit pharmaceuticals. His sentencing is set for Nov. 8 before U.S. District Judge George Wu. Ortiz-Gonzalez. His wife, Ideliz Aleman-Valentin, and two other defendants were named in a 30-count indictment handed down by a grand jury in Los Angeles in June 2009. The jury that convicted Ortiz acquitted Aleman-Valentin.

In 2009, special agents with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) executed a federal search warrant at Ortiz-Gonzalez's residence in Trujillo Alto, Puerto Rico, a suburb of San Juan. Inside the home, investigators found more than 100,000 pills made to resemble a variety of popular prescription medications, including Viagra, Cialis, Valium, Xanax and Lipitor.

The ensuing investigation revealed that Ortiz-Gonzalez had packaged and shipped more than 160,000 counterfeit tablets during a six-month period in 2009 while working for the organization. Many of those shipments were mailed to Southern California, which is why the case was brought to Los Angeles.

The burgeoning popularity of e-commerce has led to an explosion in the number of websites offering prescription drugs online," said Claude Arnold, special agent in charge for HSI Los Angeles. "But consumers who are considering purchasing pharmaceutical products over the Internet should heed that old expression 'buyer beware.' Part of what you're paying for when you buy established brands, regardless of the product, is quality control. Imposter drugs like these pose a serious threat to users who mistakenly assume these substances are safe."

The indictment allege that Ortiz-Gonzalez acted as U.S.-based distributor for a criminal enterprise, allegedly headed by Bo Jiang, 34, a Chinese national whose last known residence is New Zealand. In January 2011, Jiang was taken into custody on a provisional arrest warrant by authorities in New Zealand, but fled shortly after being released on bond. He remains a fugitive.

According to the indictment, Jiang advertised the counterfeit medications over the Internet. As part of the scheme, he allegedly recruited individuals from around the world to act as distributors for the products. The U.S.-based distributors, including Ortiz-Gonzalez, were responsible for receiving the parcels of counterfeit pharmaceuticals from China, then repacking and shipping them to fill individual customer's orders throughout the United States.

The probe, which commenced in 2008, involved HIS Los Angeles, the Food and Drug Administration, Office of Criminal Investigations and the U.S. Postal Inspection Service.

The Department of Homeland Security and the Department of Justice are working together to combat intellectual property crimes. In fiscal year 2011, HSI and U.S. Customs and Border Protection made nearly 25,000 seizures involving counterfeited and pirated products, a 24 percent increase compared to fiscal year 2010.

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.

Foreign Nationals Charged with Extensive Drug Trafficking and Identity Fraud Scheme

Eleven foreign nationals were charged Thursday, July 19, 2012, in a 90-count superseding federal indictment alleging they conspired to distribute cocaine and engaged in tax fraud, money laundering, identity theft and other financial crimes.

The indictment comes following a multi-agency Organized Crime and Drug Enforcement Task Force (OCDEF) investigation, stemming from an initial Drug Enforcement Administration (DEA) and Anchorage police drug probe. The magnitude of the financial crimes, money laundering and identity theft, resulted in the Internal Revenue Service (IRS) Criminal Investigations and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) taking a lead role.

According to the indictment, the Dominican and Mexican-national defendants engaged in a conspiracy to defraud the United States by filing false tax returns and illegally claiming millions of dollars in tax refunds. Investigators believe that between January and March the defendants conducted their scheme using names and Social Security numbers of individuals from the Commonwealth of Puerto Rico.

"Today's indictment is a clear warning that anyone who steals the identities of innocent taxpayers and uses the information for personal profit will be aggressively pursued, investigated and prosecuted, in Alaska or throughout the United States," U.S. Attorney Karen Loeffler said. "This case is an example of how interagency cooperation and teamwork can successfully bring down an entire organized criminal conspiracy."

Three laptop computers seized by investigators contained information for approximately $19 million in fraudulent refund claims, 2,600 stolen identities including individual names, Social Security numbers and other identity information. It is also alleged that one or more of the defendants obtained the physical addresses used on the tax returns by stealing mail from mailboxes in and around the Anchorage area.

The defendants obtained Alaska identification cards using the stolen identities, which were necessary to open the numerous bank accounts needed to cash their tax refund checks. They also falsely claimed to be U.S. citizens to obtain the identity documents and open the accounts.

"These criminals illegally posed as U.S. citizens and exploited our financial system for personal gain," said Brad Bench, special agent in charge of HSI Seattle, who oversees HSI investigations in Alaska. "By pooling our unique resources, legal authorities and expertise, HSI and the IRS were able to dismantle a significant scheme to defraud the people of the United States."

"The charges brought forth today against these 11 individuals serve as another reminder that IRS Criminal Investigation is aggressively pursuing those who choose to defraud the government and disrupt the lives of innocent taxpayers," stated Richard Weber, IRS Criminal Investigations chief.

"Drug traffickers' greed clearly has no limits, as evidenced by this investigation," said Douglas James DEA acting special agent in charge. "The DEA is proud of its partnership with the Anchorage Police Department, which brought this case to their federal counterparts, exposing this multi-faceted criminal organization."

The indictment also charges various defendants with submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, making false statements to banks and credit unions, and passing forged U.S. Treasury checks, as well as aggravated identity theft.

The fraud charges each carry maximum penalties of between two and 30 years imprisonment, in addition to the five-year mandatory minimum prison term required upon conviction on the drug charges.

The U.S. Postal Inspection Service and U.S. State Department's Diplomatic Security Service also investigated. The case is being prosecuted by the U.S. Attorney's Office for the District of Alaska and the U.S. Department of Justice Tax Division.

An indictment is merely a formal accusation. Defendants are presumed innocent until proven guilty in a court of law.