The Facts of IP Crimes
Kris Buckner, Investigative Consultants
The facts about Intellectual Property Crimes (IP Crimes) are really simple. IP Crimes, including trademark counterfeiting and piracy are an ever growing problem that endanger the foundation of our world and local economies. Not to mention that these crimes provide an easy source of revenue for gang members, organized crime groups, and even terrorist organizations. All of us and our communities are the victims in these types of crimes.
There is nothing positive that comes from the sales of counterfeit or pirated merchandise. In fact, everything about these crimes is negative. The people involved in the manufacturing, distribution, and sales of counterfeit trademarked merchandise are stealing. There is no difference than going into a store and taking merchandise without paying for it. The taking of someone’s intellectual property is theft, plain and simple.
The owners and creators of Intellectual Property are creative and innovative people who have worked hard to develop and create a product to share with the world. These creative minds spend years and thousands of their hard earned dollars to create and make their dreams come true. Why should a counterfeiter be allowed to come along and steal what someone else worked so hard on to create? Trademark counterfeiting is theft!
Too many people look at counterfeiting as a victimless crime and have the mentality that it is ok because “no one is getting hurt.” People are getting hurt and people are dying from counterfeit goods every year. There are numerous cases involving counterfeit goods that have resulted in hundreds of deaths. During the investigations that Investigative Consultants has conducted over the past 15 years, we have seen some very serious cases.
Counterfeiters have been known to use child labor in their production of the counterfeit goods. There have been cases where the workers making the counterfeit goods have been locked inside of factories. If there were a fire, the workers would have no way of escaping. The disregard that counterfeiters and pirates have for human life is amazing. The only thing the counterfeiters care about is the money and nothing else.
Our economy suffers in many ways. We are losing billions of dollars a year in lost tax revenue. Most counterfeiters are not paying their fair share of taxes, if any at all. There have been numerous cases where counterfeiters claim they make $ 12,000 a year, however have millions of dollars a year going through their bank accounts. The math never adds up.
During an investigation of a “street vendor” in Los Angeles, who sold pirated music, law enforcement obtained a search warrant for the vendor’s home. Law enforcement located over $ 40,000 in cash and $ 700,000 in bank accounts, along with several thousand pirated music CDs. Law enforcement also learned that the subject owned the home, valued at $ 330,000 outright. The problem is the subject was also collecting public assistance and did not pay taxes.
There have been numerous cases, where hundreds of thousands of dollars in cash have been recovered from the subjects of a counterfeiting investigation, who claim that they were “barely surviving” or they were just trying to “feed their kids.” Do not believe the tall tales that counterfeiters tell of poverty and “just getting by.” The counterfeiters are not legitimately contributing to our economy or to our communities.
In many cases, counterfeiters and pirates are paying their employees “under the table” and do not provide benefits or pay into Social Security or Workers Compensation. Counterfeiters will argue that they are creating jobs. However, aren’t all employees entitled to the protections that the law provides? When these workers are working for counterfeiters, they are often subjected to poor and dangerous working conditions. Most of these criminal organizations care nothing for the well being of the people working for them and are only concerned with their employees making them money.
How can legitimate small business owners compete with the businesses in their area selling counterfeit goods?
Friday, December 4, 2009
Tuesday, November 3, 2009
Trademark Counterfeiting
By Kris Buckner, Investigative Consultants
Trademark Counterfeiting has been in existence for hundreds of years. A trademark is a “mark” that is used in commerce to differentiate one persons goods from another’s. That is a very simple definition. A trademark creates a sense of uniqueness that consumers identify with a particular brand or company.
Companies can spend years and millions of dollars in developing and building their brand and their trademarks. Branding and developing consumer confidence & demand are key components to success for any company that wants to succeed in the marketplace.
The intellectual property of a company is one of the most valued assets that drive the success of a company. With that being said, it is important to protect what has driven the success of a brand. Trademark counterfeiters can’t be allowed to profit from the fruits of someone else’s hard work and commitment.
If counterfeiters are allowed to sell counterfeit goods, they will eventually “tarnish” the brand so badly that consumers will no longer have faith and confidence in the brand and will no longer be loyal customers. Trademark counterfeiting diminishes the value of a brand greatly.
Counterfeiters are thieves, who do not care who they hurt or possibly even kill from their criminal activity. There have been cases of trademark counterfeiting involving aircraft parts, brake pads, medicines, food items, batteries, and Christmas tree lights.
You name it and counterfeiters will fake it. They do not care who they harm as long as they are making money. There are numerous cases of counterfeiting that have actually resulted in the deaths of innocent people.
There is no brand owner that is immune from counterfeiters. The counterfeiters not only target the large and famous brands, they will also target the small upcoming brands that are just starting to make their mark in the marketplace. Counterfeiters can “kill” a brand before that brand ever truly takes off.
In order for a trademark to be protected, the mark must be registered. In the United States of America, the mark can be registered with the United States Patent and Trademark Office (USPTO) or in each individual state.
Most brand owners register their trademarks with the USPTO. The USPTO’s website is USPTO.GOV. The site can be searched to determine if a mark is actually registered. It is important for law enforcement to confirm that a mark is actually registered prior to taking any enforcement action. It is also important that the mark is registered in the appropriate class of goods.
For brand owners, it is important to register every mark that they will want to protect. Without a mark being registered, the options for protecting the mark are extremely limited and may not be able to be handled in the criminal arena.
Counterfeiters have been known to check the USPTO’s website to see what marks are and are not registered. When they find a mark that is not registered, they will immediately start counterfeiting that mark because they know law enforcement won’t take any action against them.
Counterfeiters are not dumb uneducated people, to the opposite, they are very smart ingenious people who see trademark counterfeiting as an easy way to make large sums of money and face little risk.
The Violation
The violation of trademark counterfeiting occurs when someone uses someone else’s registered trademark without their permission. There are both federal and state criminal statutes that apply to trademark counterfeiting and allow for criminal prosecution of counterfeiters.
It is important to review and learn the correct statute that applies and ensure that the “elements of the crime” are present to take any criminal enforcement action. The following things should be present when pursuing a trademark counterfeiting criminal enforcement action:
• The mark in question is a registered trademark
• The subject did not have authorization to use the trademark
• An Expert witness confirms the items are counterfeit
• The subject knew or should have known the items were counterfeit
The above factors are key elements to any successful criminal enforcement action. Remember, Intellectual Property Crimes are generally looked at as “victimless” crimes and most people do not see it as a big deal. That is why it is important to do a thorough job in any investigation that is conducted. The key factor in counterfeiting cases is usually proving knowledge on part of the subject.
If you are a law enforcement officer and would like a free copy of “Law Enforcement Guide to Working Trademark Counterfeiting Case,” please email Investigative Consultants at info@investigativeconsultants.com.
To learn more about trademark counterfeiting and protecting intellectual property rights, contact Investigative Consultants;
Investigative Consultants
http://www.investigativeconsultants.com/
310-978-4554
Trademark Counterfeiting has been in existence for hundreds of years. A trademark is a “mark” that is used in commerce to differentiate one persons goods from another’s. That is a very simple definition. A trademark creates a sense of uniqueness that consumers identify with a particular brand or company.
Companies can spend years and millions of dollars in developing and building their brand and their trademarks. Branding and developing consumer confidence & demand are key components to success for any company that wants to succeed in the marketplace.
The intellectual property of a company is one of the most valued assets that drive the success of a company. With that being said, it is important to protect what has driven the success of a brand. Trademark counterfeiters can’t be allowed to profit from the fruits of someone else’s hard work and commitment.
If counterfeiters are allowed to sell counterfeit goods, they will eventually “tarnish” the brand so badly that consumers will no longer have faith and confidence in the brand and will no longer be loyal customers. Trademark counterfeiting diminishes the value of a brand greatly.
Counterfeiters are thieves, who do not care who they hurt or possibly even kill from their criminal activity. There have been cases of trademark counterfeiting involving aircraft parts, brake pads, medicines, food items, batteries, and Christmas tree lights.
You name it and counterfeiters will fake it. They do not care who they harm as long as they are making money. There are numerous cases of counterfeiting that have actually resulted in the deaths of innocent people.
There is no brand owner that is immune from counterfeiters. The counterfeiters not only target the large and famous brands, they will also target the small upcoming brands that are just starting to make their mark in the marketplace. Counterfeiters can “kill” a brand before that brand ever truly takes off.
In order for a trademark to be protected, the mark must be registered. In the United States of America, the mark can be registered with the United States Patent and Trademark Office (USPTO) or in each individual state.
Most brand owners register their trademarks with the USPTO. The USPTO’s website is USPTO.GOV. The site can be searched to determine if a mark is actually registered. It is important for law enforcement to confirm that a mark is actually registered prior to taking any enforcement action. It is also important that the mark is registered in the appropriate class of goods.
For brand owners, it is important to register every mark that they will want to protect. Without a mark being registered, the options for protecting the mark are extremely limited and may not be able to be handled in the criminal arena.
Counterfeiters have been known to check the USPTO’s website to see what marks are and are not registered. When they find a mark that is not registered, they will immediately start counterfeiting that mark because they know law enforcement won’t take any action against them.
Counterfeiters are not dumb uneducated people, to the opposite, they are very smart ingenious people who see trademark counterfeiting as an easy way to make large sums of money and face little risk.
The Violation
The violation of trademark counterfeiting occurs when someone uses someone else’s registered trademark without their permission. There are both federal and state criminal statutes that apply to trademark counterfeiting and allow for criminal prosecution of counterfeiters.
It is important to review and learn the correct statute that applies and ensure that the “elements of the crime” are present to take any criminal enforcement action. The following things should be present when pursuing a trademark counterfeiting criminal enforcement action:
• The mark in question is a registered trademark
• The subject did not have authorization to use the trademark
• An Expert witness confirms the items are counterfeit
• The subject knew or should have known the items were counterfeit
The above factors are key elements to any successful criminal enforcement action. Remember, Intellectual Property Crimes are generally looked at as “victimless” crimes and most people do not see it as a big deal. That is why it is important to do a thorough job in any investigation that is conducted. The key factor in counterfeiting cases is usually proving knowledge on part of the subject.
If you are a law enforcement officer and would like a free copy of “Law Enforcement Guide to Working Trademark Counterfeiting Case,” please email Investigative Consultants at info@investigativeconsultants.com.
To learn more about trademark counterfeiting and protecting intellectual property rights, contact Investigative Consultants;
Investigative Consultants
http://www.investigativeconsultants.com/
310-978-4554
Wednesday, October 21, 2009
Gangs and Intellectual Property Crimes
Gangs & Intellectual Property Crimes
By Kris Buckner, Investigative Consultants
Trademark Counterfeiting, Piracy, and other Intellectual Property Crimes are the perfect types of crimes for gang members and organized crime groups to be involved in.
The answer why is very simple. These criminals face very low risk, however the rewards are extremely great. These crimes are all about the money. Most people do not realize the money that can be made by engaging in the theft of someone’s intellectual property. Intellectual property theft is estimated to be a 500 billion dollar a year problem.
Gang members and other criminals can make more money selling counterfeit goods than by committing robberies, selling dope, or carrying out their other normal street hustling crimes. Counterfeiters can make tens of thousands of dollars a month hawking their counterfeit shoes, handbags, or other assorted products.
It is amazing how much demand exists for counterfeit goods, so this creates the “Perfect Storm” for the gangsters to make big money. If the demand is there, someone will supply what the consumer wants. Whether it is drugs, counterfeit goods, or whatever else.
The gangsters face little risk of going to prison for trademark counterfeiting or piracy; however they are making money hand over fist selling counterfeit goods. They are making the same amount of money as if they were selling kilos of Cocaine.
Remember, if you get caught selling kilos of Cocaine, you are going to prison for years. So why sell kilos of Cocaine, when you can sell counterfeit goods and make just as much money and not risk going to prison for years?
Gang members take advantage of every aspect of Intellectual Property Crimes. In areas that have high concentrations of stores and street vendors, gang members have been known to “tax” the local vendors to allow them to sell their counterfeit goods. In one case in Los Angeles, two 18th Street Gang Members were arrested after shooting and killing a three week old child.
It was reported that the 18th Street gang members approached a vendor that was selling pirated DVD movies on the street. The vendor had his new born son with him. The gang members demanded that he pay them “tax” for selling the DVDs in their area. When the vendor refused, they shot at him. The bullet that was fired struck and killed his young son.
In another case, gang members suspected that a “fellow” seller of counterfeit items had “ratted” them out to law enforcement and reveled where they were getting their counterfeit merchandise. The gangsters chased the subject down and stabbed him multiple times, then they set him on fire and left him in the street to die.
The Los Angeles County Sheriff’s Department investigated a trademark counterfeiting case involving sunglasses, perfumes, and shoes. One of the subjects arrested turned out to be a previously deported El Monte Flores Gang member with a history of violence towards law enforcement. The subject’s father turned out to be a high ranking member of Le Eme, The Mexican Mafia. During the investigation, law enforcement seized over 2 million dollars worth of counterfeit goods.
There are many stories of hard core gang members and their associates becoming involved in trademark counterfeiting and piracy. There are documented cases involving the following gangs:
• MS-13
• 18TH Street
• East Coast Crips
• Grape Street Crips
• El Monte Flores
• 36th Street Gang
• Rough Riders
• 4 Trey Crips
• 42nd Street Little Gangsters
• Slauson Boys
• Compton Crips
• Raymond Street Crips
• Southside Montebello
• 190 East Coast Crips
• Los Carnales
• Compton Varrio 155
• Rolling 60’s
• Watergate Crips
• Skyline Pirus
• Hells Angels
The trademark counterfeiting and piracy laws are in place, however it is not often when counterfeiters are ever sentenced to lengthy prison terms. Until these gang members feel that counterfeiting is no longer worth the risk, they will continue to become deeply involved in trademark counterfeiting and piracy and reap large financial benefits.
Gang members are not stupid people, in fact they are very resourceful and creative. They are clearly learning that engaging in intellectual property theft can be very lucrative. In the past few years, there has been a dramatic increase in gang related trademark counterfeiting cases.
It is important to realize that Intellectual Property Crimes create a huge opportunity for the gangsters to make money to fund their other criminal activities, such as drug trafficking, extortion, identity theft, murders, human trafficking, and other serious and violent crimes.
The easy opportunity that these crimes create must be taken away from these serious criminals. The gangsters must not be allowed to engage in Intellectual Property Theft to benefit their violent criminal organizations.
To learn more about protecting intellectual property, visit
http://www.investigativeconsultants.com/
To report Counterfeiting or for more information please contact:
310-978-4554
Info@Investigativeconsultants.com
By Kris Buckner, Investigative Consultants
Trademark Counterfeiting, Piracy, and other Intellectual Property Crimes are the perfect types of crimes for gang members and organized crime groups to be involved in.
The answer why is very simple. These criminals face very low risk, however the rewards are extremely great. These crimes are all about the money. Most people do not realize the money that can be made by engaging in the theft of someone’s intellectual property. Intellectual property theft is estimated to be a 500 billion dollar a year problem.
Gang members and other criminals can make more money selling counterfeit goods than by committing robberies, selling dope, or carrying out their other normal street hustling crimes. Counterfeiters can make tens of thousands of dollars a month hawking their counterfeit shoes, handbags, or other assorted products.
It is amazing how much demand exists for counterfeit goods, so this creates the “Perfect Storm” for the gangsters to make big money. If the demand is there, someone will supply what the consumer wants. Whether it is drugs, counterfeit goods, or whatever else.
The gangsters face little risk of going to prison for trademark counterfeiting or piracy; however they are making money hand over fist selling counterfeit goods. They are making the same amount of money as if they were selling kilos of Cocaine.
Remember, if you get caught selling kilos of Cocaine, you are going to prison for years. So why sell kilos of Cocaine, when you can sell counterfeit goods and make just as much money and not risk going to prison for years?
Gang members take advantage of every aspect of Intellectual Property Crimes. In areas that have high concentrations of stores and street vendors, gang members have been known to “tax” the local vendors to allow them to sell their counterfeit goods. In one case in Los Angeles, two 18th Street Gang Members were arrested after shooting and killing a three week old child.
It was reported that the 18th Street gang members approached a vendor that was selling pirated DVD movies on the street. The vendor had his new born son with him. The gang members demanded that he pay them “tax” for selling the DVDs in their area. When the vendor refused, they shot at him. The bullet that was fired struck and killed his young son.
In another case, gang members suspected that a “fellow” seller of counterfeit items had “ratted” them out to law enforcement and reveled where they were getting their counterfeit merchandise. The gangsters chased the subject down and stabbed him multiple times, then they set him on fire and left him in the street to die.
The Los Angeles County Sheriff’s Department investigated a trademark counterfeiting case involving sunglasses, perfumes, and shoes. One of the subjects arrested turned out to be a previously deported El Monte Flores Gang member with a history of violence towards law enforcement. The subject’s father turned out to be a high ranking member of Le Eme, The Mexican Mafia. During the investigation, law enforcement seized over 2 million dollars worth of counterfeit goods.
There are many stories of hard core gang members and their associates becoming involved in trademark counterfeiting and piracy. There are documented cases involving the following gangs:
• MS-13
• 18TH Street
• East Coast Crips
• Grape Street Crips
• El Monte Flores
• 36th Street Gang
• Rough Riders
• 4 Trey Crips
• 42nd Street Little Gangsters
• Slauson Boys
• Compton Crips
• Raymond Street Crips
• Southside Montebello
• 190 East Coast Crips
• Los Carnales
• Compton Varrio 155
• Rolling 60’s
• Watergate Crips
• Skyline Pirus
• Hells Angels
The trademark counterfeiting and piracy laws are in place, however it is not often when counterfeiters are ever sentenced to lengthy prison terms. Until these gang members feel that counterfeiting is no longer worth the risk, they will continue to become deeply involved in trademark counterfeiting and piracy and reap large financial benefits.
Gang members are not stupid people, in fact they are very resourceful and creative. They are clearly learning that engaging in intellectual property theft can be very lucrative. In the past few years, there has been a dramatic increase in gang related trademark counterfeiting cases.
It is important to realize that Intellectual Property Crimes create a huge opportunity for the gangsters to make money to fund their other criminal activities, such as drug trafficking, extortion, identity theft, murders, human trafficking, and other serious and violent crimes.
The easy opportunity that these crimes create must be taken away from these serious criminals. The gangsters must not be allowed to engage in Intellectual Property Theft to benefit their violent criminal organizations.
To learn more about protecting intellectual property, visit
http://www.investigativeconsultants.com/
To report Counterfeiting or for more information please contact:
310-978-4554
Info@Investigativeconsultants.com
Monday, February 16, 2009
LONG BEACH ANTI-COUNTERFEITING TASKFORCE
The Investigative Consultants team assisted The Long Beach Police Department’s Directed Enforcement Team in a anti-counterfeiting taskforce action recently. The Long Beach PD identified four locations where gang activity was occurring and that they believed may also be involved in the sales of counterfeit goods. Undercover investigators conducted multiple undercover buys from the locations. The owner’s of each of the locations admitted that they were selling counterfeit goods.
Long Beach PD officers obtained search warrants for all four locations. The warrants were served and a total of six arrests were made. Law enforcement recovered a large quantity of counterfeit shoes, jeans, and other clothing items. Officers also recovered drugs and several handguns. One of the handguns that was recovered had reportedly been stolen from a law enforcement officer. This was a great intellectual property enforcement action carried out by the Long Beach Police Department.
By Investigative Consultants
Friday, February 6, 2009
OPERATION "DESIGNED jUSTICE"
Law enforcement officials from around Northern California successfully wrapped up Operation “Designed Justice” with the arrests of multiple subjects and the seizure of millions of dollars worth of counterfeit goods. Operation Designed Justice involved the US Secret Service, Federal Bureau of Investigation, Internal Revenue Service, Immigration Customs Enforcement, US Attorney’s Office, State Parole, Sacramento County Sheriff’s Department, Placer County Sheriff’s Department, Sacramento Police Department, Galt Police Department, Lodi Police Department, Elk Grove Police Department and a team from Investigative Consultants. The operation was spearheaded by Detective Jim Hudson of the Placer County Sheriff’s Department and Special Agent Kelly Shintaku of the U.S. Secret Service.
The operation targeted major distributors of all types of counterfeit goods that were being distributed from the Galt Flea Market in Galt, California. During the investigation of the subjects, it was determined that several of the targets were actually importing the counterfeit goods directly from China and were also involved in other serious crimes.
At first glance, one would believe that the subjects at the flea market were “small time” swap meet type vendors. Law enforcement learned very quickly that this was not the case. The subjects of the investigation were selling all types of counterfeit goods, including counterfeit electrical items. Samples of the counterfeit electrical items were tested for safety. The tests revealed that the electrical items were actually very dangerous and posed a serious safety risk.
During the operation, law enforcement was able to identify numerous storage areas that were being used to store counterfeit goods, along with a residence that was being used to manufacture counterfeit handbags and wallets. Several of the subjects are being prosecuted federally, while others face state counterfeiting charges. This operation was a huge success and is a true example of how several law enforcement agencies can come together to destroy an ongoing criminal enterprise. Job well done.
The operation targeted major distributors of all types of counterfeit goods that were being distributed from the Galt Flea Market in Galt, California. During the investigation of the subjects, it was determined that several of the targets were actually importing the counterfeit goods directly from China and were also involved in other serious crimes.
At first glance, one would believe that the subjects at the flea market were “small time” swap meet type vendors. Law enforcement learned very quickly that this was not the case. The subjects of the investigation were selling all types of counterfeit goods, including counterfeit electrical items. Samples of the counterfeit electrical items were tested for safety. The tests revealed that the electrical items were actually very dangerous and posed a serious safety risk.
During the operation, law enforcement was able to identify numerous storage areas that were being used to store counterfeit goods, along with a residence that was being used to manufacture counterfeit handbags and wallets. Several of the subjects are being prosecuted federally, while others face state counterfeiting charges. This operation was a huge success and is a true example of how several law enforcement agencies can come together to destroy an ongoing criminal enterprise. Job well done.
Thursday, February 5, 2009
SHOES, SUNGLASSES, AND PERFUMES???
The Los Angeles County Sheriff’s Department, COPS Bureau has become very active in pursuing counterfeiting and piracy cases. Sergeant Sandecki and his team from COPS Bureau recently wrapped up a major investigation involving the sales, distribution, and manufacturing of counterfeit merchandise. Sandecki’s case involved a subject that was importing blank sunglasses into the United States from China. Once the subject received the sunglasses here, the subject would have the sunglasses printed with the counterfeit trademarks. The subject was operating from a warehouse in Santa Fe Springs, California and was having the sunglasses printed in a small apartment in Los Angeles.
Sergeant Sandecki obtained a search warrant for both locations. The warrants were served simultaneously and multiple subjects involved in the operation were arrested. Sandecki and his team recovered counterfeit shoes, sunglasses, and perfumes valued at over $ 3,000,000. One of the subjects was found to be a documented violent gang member, who had been previously deported from the United States. ICE was called to the scene to assist LASD. ICE took custody of the subject, who will now be spending some quiet time in a federal prison. Nice team effort.
By Investigative Consultants
Wednesday, February 4, 2009
TRAINING AND EDUCATION
On 1-22-09, The IACC Foundation, Investigative Consultants, and the Los Angeles County Sheriff’s Department hosted another successful training event. The training was attended by over 190 law enforcement officials from throughout California and numerous brand owners. A special thanks to Captain Berner, Lt. Stedman, Sergeant Munson, Sergeant Sandecki, Deputy DA Yabuno, Officer Siurek, James Hooper, and all the attendees, who made this event a huge success.By Investigative Consultants
Tuesday, February 3, 2009
A CASE OF COUNTERFEIT AND NATIONAL SECURITY!
On 1-21-09, The FBI announced the arrests of two Southern California men on charges of exporting controlled items to the People’s Republic of China without a license, trafficking in counterfeit goods, and conspiracy to traffic in counterfeit goods. Michael Ming Zhang of Rancho Cucamonga, California, and Policarpo Coronado Gamboa, of Foothill Ranch, California, were charged in two separate indictments last week and arrested. Participating in the arrests were agents with the FBI; U.S. Department of Commerce’s Bureau of Industry and Security - Office of Export Enforcement; U.S. Defense Criminal Investigative Service – Office of Inspector General; U.S. Postal Inspection Service; U.S. Immigration and Customs Enforcement (ICE); and deputies from the Orange County Sheriff’s Department, as well as a team from Investigative Consultants.
According to an indictment returned by a federal grand jury in Los Angeles on January 13th, 2009, Michael Ming Zhang allegedly exported U.S. Department of Commerce (DOC) controlled electronic components to his company’s Shenzhen branch office in the People’s Republic of China (PRC), and to a transshipment point company, Fangyuan Electronics Ltd. (Fangyuan), in the PRC and Hong Kong.
It is illegal to export Department of Commerce-controlled electronic items to the PRC without an export license for specified end-users. The items, known as dual-use technology, are controlled by the Department of Commerce for export to the PRC for national security reasons since they have civilian and military applications. Among the illegal exports were components manufactured by Vetronix Research Corporation in the U.S, whose technology is currently used in the U.S. Army’s battle tanks.
The indictment further alleges that Zhang knowingly and intentionally trafficked in counterfeit Cisco electronic components bearing counterfeit marks from the PRC for distribution in the United States. The indictment alleges that Zhang imported and trafficked a total of at least 4,300 counterfeit Cisco computer networking components in at least 25 separate transactions with an estimated retail market value of more than $3.3 million.
The second indictment alleges that Zhang and co-defendant, Coronado Gamboa, conspired to import Sony electronic components bearing counterfeit marks from the PRC for distribution in the United States. Coronado Gamboa allegedly conspired with Zhang to purchase the counterfeit Sony electronic components in at least 10 separate transactions. The components were then sold in the U.S. and around the world.
According to an indictment returned by a federal grand jury in Los Angeles on January 13th, 2009, Michael Ming Zhang allegedly exported U.S. Department of Commerce (DOC) controlled electronic components to his company’s Shenzhen branch office in the People’s Republic of China (PRC), and to a transshipment point company, Fangyuan Electronics Ltd. (Fangyuan), in the PRC and Hong Kong.
It is illegal to export Department of Commerce-controlled electronic items to the PRC without an export license for specified end-users. The items, known as dual-use technology, are controlled by the Department of Commerce for export to the PRC for national security reasons since they have civilian and military applications. Among the illegal exports were components manufactured by Vetronix Research Corporation in the U.S, whose technology is currently used in the U.S. Army’s battle tanks.
The indictment further alleges that Zhang knowingly and intentionally trafficked in counterfeit Cisco electronic components bearing counterfeit marks from the PRC for distribution in the United States. The indictment alleges that Zhang imported and trafficked a total of at least 4,300 counterfeit Cisco computer networking components in at least 25 separate transactions with an estimated retail market value of more than $3.3 million.
The second indictment alleges that Zhang and co-defendant, Coronado Gamboa, conspired to import Sony electronic components bearing counterfeit marks from the PRC for distribution in the United States. Coronado Gamboa allegedly conspired with Zhang to purchase the counterfeit Sony electronic components in at least 10 separate transactions. The components were then sold in the U.S. and around the world.
Monday, January 26, 2009
COUNTERFEIT JEAN FACTORY RAIDED
Officials from the California Department of Labor were recently conducting an investigation of a sewing factory in the City of Los Angeles. The officials were at the location investigating labor issues when the very observant officials noticed that the factory was making name brand jeans. This seemed very suspicious and rightfully so. The official had recently received our IP Crimes newsletter.
Investigative Consultants was contacted and determined that the factory was in fact involved in the manufacturing of counterfeit jeans. This is a great find, as a majority of counterfeit jeans are now being made outside of the United states.
LAPD responded to the location and arrested the owners of the location, who were a husband and wife team. The sewing factory had several sewing machines and had the capability to make thousands of counterfeit jeans on a weekly basis. LAPD recovered several hundred pairs of completed jeans, along with thousands of counterfeit buttons, labels, tags, rivets, and other items. The owners of the location claimed that the jeans were “dropped off” by some unknown person and they were just being nice and sewing the jeans together for the unknown man. Not a very believable story. Way to keep your eyes open!!!
Friday, January 16, 2009
OC Piracy Operation Shut Down!
Investigative Consultants assisted Orange County law enforcement officials in the largest recovery of pirated merchandise in California’s history. Law enforcement conducted an extensive investigation into the sales, manufacture, and distribution of pirated music and movies throughout Orange County, California.
Law enforcement identified an entire network that was involved in a major piracy operation. Law enforcement served multiple search warrants and arrested the primary subject. Based on law enforcement’s outstanding efforts, over 3,000,000 pirated items were recovered and taken into evidence. This was the largest seizure of pirated goods in California’s history.
By: Investigative Consultants
Law enforcement identified an entire network that was involved in a major piracy operation. Law enforcement served multiple search warrants and arrested the primary subject. Based on law enforcement’s outstanding efforts, over 3,000,000 pirated items were recovered and taken into evidence. This was the largest seizure of pirated goods in California’s history.
By: Investigative Consultants
Thursday, January 15, 2009
SWAP MEET ENFORCEMENT!
The LA County Sheriff’s Department, COPS Bureau has continued their very effective trademark counterfeiting and music piracy program targeting the sales of pirated and counterfeit goods at swap meets in and around Los Angeles County. The LASD’s anti counterfeiting efforts have made a huge impact on the sales of counterfeit goods at swap meets.
The Sheriff’s department has conducted actions at multiple swap meets and made a total of over 30 arrests for counterfeiting and piracy violations. The program has been so successful that swap meet mangers and swap meet personnel are now taking proactive steps to keep counterfeit goods from being sold at their markets. Several swap meets are starting to understand the importance of intellectual property protection and have implemented brand protection procedures.
The impact is being felt at swap meets all over LA County and it appears that LASD’s efforts have caused at least a 30% decrease in the sales of counterfeit goods at swap meets throughout Los Angeles County. This includes swap meets where no actions have taken place.
By: Investigative Consultants
The Sheriff’s department has conducted actions at multiple swap meets and made a total of over 30 arrests for counterfeiting and piracy violations. The program has been so successful that swap meet mangers and swap meet personnel are now taking proactive steps to keep counterfeit goods from being sold at their markets. Several swap meets are starting to understand the importance of intellectual property protection and have implemented brand protection procedures.
The impact is being felt at swap meets all over LA County and it appears that LASD’s efforts have caused at least a 30% decrease in the sales of counterfeit goods at swap meets throughout Los Angeles County. This includes swap meets where no actions have taken place.
By: Investigative Consultants
Monday, January 12, 2009
OPERATION SAN PEDRO ALLEY
The LAPD’S intellectual property protection efforts focusing on stopping the sales and distribution of counterfeit goods around the downtown Los Angeles area have been very effective. Based on the efforts of the LAPD in and around the infamous Santee Alley area, several of the vendors selling counterfeit goods and pirated music have moved away from Santee Alley and have now set up shop in the San Pedro alley.The San Pedro Alley is now becoming a “hot spot” for the sales of counterfeit and pirated goods. Investigative Consultants recently assisted the LAPD in a major action in the San Pedro Alley area. The LAPD made a total of 14 arrests during the action. The LAPD is more committed than ever to stop trademark counterfeiting, movie piracy, and music piracy. The LAPD has been doing their best to enforce the counterfeiting laws.
By: Investigative Consultants
Tuesday, January 6, 2009
HOW MUCH MONEY CAN COUNTERFEITERS MAKE?
The common perception is “not much.” Well that’s not true. Those involved in intellectual property crimes, such as music piracy and the sales of counterfeit products can make huge amounts of money. Trademark law and other laws are designed to protect the rights of every person, who creates and innovates. In one music piracy case alone, the subject, who we will call “Angelica” was involved in what appeared to be the low level street sales of pirated music.
I remember myself feeling sorry for her thinking, well she is just trying to make a living and she seemed like such a nice lady. We all know “the ends do not justify the means” and intellectual property crimes hurt us all in so many ways. Angelica appeared to be so nice and unassuming. Well after being arrested a couple of times for selling pirated music on the streets of Los Angeles and being served with over 15 cease and desist notices, law enforcement served a search warrant at her house. Guess what? They found several thousand pirated music CDs, along with $ 40,000 in cash. The cops also found records that Angelica had over $ 700,000 cash in bank accounts and that she owned her $ 300,000 home outright. If that was not enough, turns out that she was on public assistance and obviously not paying her fair share of taxes. During the search, law enforcement also found information and evidence that Angelica was involved in loan sharking activities. This is one of many stories like this.
By Investigative Consultants
Monday, January 5, 2009
L.A. ANTI PIRACY TASKFORCE UPDATE
On December 23, 2008, The Los Angeles Anti Piracy Taskforce held a press conference in Los Angeles. Investigative Consultants assisted the LAPD and LASD in multiple brand protection enforcement actions targeting music piracy and trademark counterfeiters leading up to the conference. The taskforce addressed the issues of intellectual property protection and the need for anti counterfeiting coalitions. There is solid evidence that counterfeiting and piracy funds terrorism and organized crime groups and that is one of the reasons why the counterfeiting laws throughout the United States have been toughened.
The Anti Counterfeiting Group assembled at the conference, included city and county officials, along with various law enforcement officials. The taskforce members spoke about movie piracy statistics and music piracy statistics, along what efforts need to take place to increase intellectual property protection.
Investigative Consultants identified numerous trademark counterfeiting and music piracy operations in the weeks leading up to the press conference. Based on the information provided by Investigative Consultants, law enforcement arrested 32 people for the sales of counterfeit products and music piracy violations. Law enforcement seized over 8 million dollars worth of counterfeit products. Investigative Consultants applauds the work of the taskforce and the anti counterfeiting coalitions.
By Investigative Consultants
Friday, January 2, 2009
GANGS AND COUNTERFEIT GOODS
In 2008, we saw a large increase in cases involving documented gang members being involved in the sales and distribution of counterfeit goods. This trend appears to be growing and it appears that the answer why is simple, low risk, high reward. LASD recently had a counterfeit case involving an El Monte Flores gang member, who had previously been deported from the United States and has close ties to Le Eme. During this case, LASD seized over 2 million dollars worth of counterfeit merchandise, including shoes, perfumes, and sunglasses during their investigation.
The LAPD conducted multiple enforcement actions on a business called Now What Clothing in their Southeast Division. The location was being operated by the East Coast Crips. During the actions, LAPD recovered several handguns, 2 pounds of Marijuana, and a kilo of Methamphetamine. The Southeast Division of LAPD has also had other cases involving the Grape Street Crips and the 4 tray Crips. These cases have involved routine traffic stops and also the gangsters setting up retail stores. It appears that these stores are also being used as a front for the sales of guns and narcotics.
In LAPD’s Central Division, we have seen cases involving MS 13, 18th Street, 42nd Street Little Gangsters, and 36th Street. Most of these cases involved music piracy and luxury goods, such as handbags and sunglasses being sold in and around the Santee Alley area.
The LAPD’s Harbor Vice Unit arrested a Compton Crip, who was selling counterfeit shoes from the trunk of his car in front of a laundry mat. The gangster told law enforcement that he could make good money selling the counterfeit shoes and that no one was going to prison for it. This is the gangster mentality when it comes to selling counterfeit merchandise. Remember, gangsters can make more money selling counterfeit goods than they can selling drugs.
By Investigative Consultants
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