Forfeited Funds Generated By Internet Sales Of Phony Antivirus Software.

Story courtesy of the IACC (International Anti-Counterfeiting Coalition).

SAN JOSE, Calif. Federal authorities have seized nearly $15 million from a Swiss bank account belonging to a former Bay Area man who fled the country following his indictment three years ago on federal charges for selling millions of dollars worth of counterfeit antivirus software over the Internet.

The seizure last week of $14.8 million from an investment account in Switzerland is the latest federal enforcement action involving Shaileshkumar “Sam” Jain, 41. Jain was initially indicted in March 2008 by a grand jury in San Jose, Calif., for trafficking in counterfeit goods, wire fraud and mail fraud following a probe by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). That case is being prosecuted by the U.S. Attorney’s Office for the Northern District of California.

In March 2010, the U.S. Attorney’s Office for the Southern District of New York filed a civil complaint alleging that Jain and others had transferred millions of dollars from their scheme into a Swiss bank account. Those funds were forfeited to the United States and the forfeiture was completed on May 31, after the Swiss government wire transferred the funds to the U.S. Treasury in compliance with a federal seizure warrant issued in the Southern District of New York. The U.S. Attorney’s Office for the Southern District of New York also indicted Jain on domestic and international money laundering charges in May 2010.

ICE HSI’s criminal investigation into Jain began in 2007 after the agency received information he was selling counterfeit Symantec antivirus software on various Internet websites. According to the seizure warrant, Jain lured potential customers to his websites by “spamming,” sending unsolicited emails to prospective Symantec customers, and by automatically “redirecting” potential Symantec customers to fraudulent websites. After customers provided their credit card information to purchase what they believed were authentic Symantec products, Jain fulfilled the orders by shipping counterfeit software from a facility in Ohio. To hide the proceeds from his criminal activities, Jain established shell corporations here and overseas and opened bank and investment accounts in the United States, Uruguay and Switzerland.

As this seizure makes clear, intellectual property thieves should be aware that law enforcement will use every available tool to keep them from profiting from the theft of others’ products, creativity, and ideas,” said ICE Director John Morton. “HSI’s investigative work in this case is very much ongoing and we’re continuing our efforts to locate this fugitive so he can be brought to justice for his crimes. We’re also hopeful some of his ill-gotten gains will soon go to compensate the legitimate software maker that lost millions as a result of this scheme.”

Last month’s action marks the second significant monetary forfeiture in this case. In April 2008, the U.S. Attorney’s Office for the Northern District of California obtained a warrant for the seizure of more than $650,000 in funds from two East Coast investment accounts that held proceeds from Jain’s illegal Internet sales.

Jain, who surrendered to ICE HSI agents here in May 2008, has been a fugitive since January 2009 when he failed to appear for two scheduled hearings related to his case in U.S. District Court in San Jose, Calif. HSI agents are continuing efforts to locate him so he can be extradited to the United States to face the current charges. Anyone with information about Jain’s possible whereabouts is urged to contact ICE’s 24-hour tip line – 1-866-DHS-2ICE.

ICE HSI in San Jose received substantial assistance with the case from HSI agents in New York City and the agency’s overseas attach offices in Buenos Aires, Argentina, Brasilia, Brazil, and Bern, Switzerland, as well as from the Internal Revenue Service – Criminal Investigations in San Francisco.

Photo Above: Wisconsin High School All Star Tiffany Duncan (left), and Donald Dobert, President, ATL.

Athletes, coaches, and game attendees from throughout Wisconsin will converge on Middleton on July 30th, 2011 for the All Star Soccer Camp and Games. The event is sponsored by The Wisconsin Masonic Soccer Foundation (WMSF). In addition to giving statewide recognition to Wisconsin’s finest high school players, there will be a soccer camp for financially underprivileged kids between the ages of 11 and 13. There are no charges to the families of the young camp attendees.

Past sponsors include car dealers, insurance companies, banks, and the Green Bay Packers.

Story courtesy of the IACC (International Anti-Counterfeiting Coalition).

3,600 counterfeit items seized from three stores worth over $400,000.

BALTIMORE A Maryland man was sentenced to 30 months in prison followed by three years of supervised release for selling counterfeit items with brand names such as Coach, Louis Vuitton, Dolce & Gabbana, Prada, Chanel, Gucci, Polo and Nike. The sentence is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Maryland State Police and Baltimore County Police Department.

Marvin Anthony Johnson, 47, of Baltimore, was sentenced by U.S. District Judge Catherine C. Blake for trafficking in counterfeit goods. Johnson is also required Johnson to forfeit $23,957 in unlawful proceeds seized by law enforcement in September 2010.

The sentence was announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of ICE HSI in Baltimore; Colonel Terrence Sheridan, Superintendent of the Maryland State Police; and Chief James W. Johnson of the Baltimore County Police Department.

“Counterfeiters like Mr. Johnson rip off consumers by selling sub-standard products,” said Special Agent in Charge Winter. “The protection of intellectual property is a top priority for HSI, as counterfeit products represent a triple threat by delivering shoddy and sometimes dangerous, goods into commerce, by funding organized criminal activities and by denying Americans good-paying jobs.”

According to his guilty plea, Johnson owned and operated a retail store known as “Prestigious Fashions” located at 501-A Pennsylvania Avenue in Baltimore; a sales booth known as “Marvin’s Prestigious” located within the North Point Flea Market on North Point Road in Baltimore; and another sales booth within Hunter’s Sales Barn, located on Jacob Tome Memorial Highway in Port Deposit, Md. From July to Sept. 3, 2010, Johnson sold counterfeit luxury apparel and accessories from those stores that bore trademarks identical to trademarks used by Coach, Louis Vuitton, Dolce & Gabbana, Prada, Chanel, Gucci, Polo and Nike.

In August 2010, undercover Baltimore County Police officers twice purchased counterfeit goods from Johnson at the two sales booths. Johnson said the items were “fake” and also told undercover officers that he hosts “purse parties” in order to sell the counterfeit items. Baltimore County police officers observed Johnson selling other counterfeit goods.

On Sept. 2 and 3, 2010, law enforcement executed search warrants at six locations and vehicles associated with Johnson and seized approximately 3,600 items of counterfeit luxury wearing apparel and accessories with the above stated brand names, among others. The lost retail value, or infringement amount, of the goods seized is estimated to be between $400,000 and $1 million. Officers also seized approximately $23,957 in cash. Also located in Johnson’s van was a cease and desist letter from Coach, directed at the owners/operators of a flea market, and outlines the illegalities of selling counterfeit goods. Johnson’s handwriting appeared on the back of the letter in which he made notations regarding further sales of counterfeit goods.

The HSI-led National Intellectual Property Rights Coordination Center (IPR Center) stands at the forefront of the U.S. Government’s response to global intellectual property (IP) theft. As a task force, the IPR Center uses the expertise of its 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. To learn more about IP theft, please visit www.IPRCenter.gov.

U.S. Attorney Rod J. Rosenstein commended ICE HSI, Maryland State Police and Baltimore County Police Department for their work in the investigation.

Mr. Rosenstein thanked Assistant U.S. Attorney Sandra Wilkinson who prosecuted the case.

Story courtesy of the IACC (International Anti-Counterfeiting Coalition).

DENVER- A Chinese national was sentenced on Thursday to serve seven years and three months in federal prison for trafficking in counterfeit versions of the pharmaceutical weight-loss drug known as “Alli.” The sentence was pronounced by U.S. District Judge Philip B. Brimmer.

This case was investigated by the following federal agencies: U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA OCI), and the U.S. Postal Inspection Service.

Shengyang Zhou, aka “Tom,” 31, of Kunming, Yunnan, China, was ordered to pay restitution totaling $504,815.39 to the victims of his crime, including an emergency room doctor from Texas who suffered a mild stroke from ingesting the counterfeit medication. Following his prison sentence, Zhou will be deported. He appeared at the sentencing hearing in custody, and was remanded immediately following the hearing.

Zhou was first charged by Criminal Complaint on March 5, 2010. He was arrested based on a Criminal Complaint on March 23, 2010 in Honolulu, Hawaii. Zhou was indicted by a federal grand jury in Denver on April 22, 2010. The government sought a superseding indictment on Nov. 17, 2010. He pleaded guilty on Jan. 24, 2011 and was sentenced June 2.

According to court documents, between December 2008 and March 2009 the FDA issued a series of alerts on its website concerning tainted weight-loss pills and counterfeit drugs. Initial alerts focused on “Superslim,” “2 Day Diet,” and Meitzitang, among other purported weight-loss products believed to have been imported from China and marketed as dietary supplements or nutritional products. The FDA stated in these initial alerts that the items posed a very serious health risk to consumers, because, based on analysis, they were found to be drugs that contained undeclared active pharmaceutical ingredients, including Sibutramine (a non-narcotic controlled substance).

Sibutramine can cause high blood pressure, seizures, tachycardia, palpitations, heart attack or stroke. In later alerts, the FDA warned the public about counterfeit versions of the brand-name drug Alli, a popular over-the-counter weight-loss drug manufactured by GlaxoSmithKlein. The alerts indicated that these counterfeit drugs were also being imported into the United States from China and did not contain the proper active pharmaceutical ingredient for the authentic product; instead they contained dangerous levels of Sibutramine. The counterfeit versions of Alli were being sold in the United States, among other ways, through Internet websites, including online auction websites, such as eBay.

During the course of the investigation, law enforcement agents identified Zhou as the trafficker and importer into the United States of these counterfeit and unapproved purported weight-loss-related drugs. Zhou also identified himself as the manufacturer of the counterfeit Alli.

Zhou’s website, “www.2daydietshopping.com,” indicated that his business operated a U.S. branch out of Plano, Texas. Agents determined through investigation that the branch was operated by Qing Ming Hu, a naturalized U.S. citizen born in China. Some of the unapproved product featured in FDA public alerts was shipped to Hu for re-distribution to U.S. customers. Hu was also prosecuted, and received a sentence of three years probation.

Agents acting in an undercover capacity placed numerous orders for the counterfeit and illegal diet pills. In turn, money was wired to bank accounts. At one point, two agents flew to a third country in an undercover capacity to meet with Zhou. At that meeting they discussed in depth Zhou’s manufacturing capabilities. Zhou identified himself as the manufacturer of the counterfeit Alli and promised to fix defects in the counterfeit versions of the Alli he had previously shipped, defects that had been noted by the FDA in its public alerts. During that meeting the undercover agents told Zhou that they had access to a private customs broker who would be willing to import the counterfeit Alli into the United States through air cargo shipments that would be mis-described.

As the investigation continued, undercover agents and Zhou agreed to meet in Hawaii to discuss increasing the order for counterfeit Alli. At that meeting Zhou provided proof that he was capable of producing large quantities of Alli, and that he had cured certain imperfections. At the end of the meeting, agents handed Zhou cash to complete the Alli order transaction. At that point, Zhou was arrested.

A number of consumers reported feeling an assortment of adverse physical effects from taking the counterfeit Alli that they had purchased from the defendant’s web page or through a re-distributor. One consumer, an emergency room doctor, suffered a mild stroke after ingesting the counterfeit Alli.

“Today’s sentence demonstrates what can be accomplished when the FDA Office of Criminal Investigations, ICE Homeland Security Investigations, and U.S. Postal Inspection Service combine resources to investigate and apprehend an international criminal whose actions were harming Americans,” said U.S. Attorney John Walsh, District of Colorado. “Those who rely on the Internet to obtain their prescription medication must do due diligence to ensure they are dealing with a reputable company providing the actual medicine prescribed by a physician.”

“After working closely with our law enforcement counterparts to secure a conviction following our extensive investigation, this prison sentence sends a strong message to current and potential pharmaceutical counterfeiters of the consequences that await them,” said David M. Marwell, special agent in charge of ICE HSI in Denver. “This case demonstrates how our agents pooled their experience, expertise, and law enforcement authorities to shut down this criminal enterprise, and help protect the public.”

“FDA’s Office of Criminal Investigations, working in concert with the United States Attorney’s Office and other foreign and domestic government agencies, will protect the public health by aggressively targeting those responsible for counterfeiting pharmaceutical drugs,” said Patrick J. Holland, special agent in charge of the FDA Office of Criminal Investigations Kansas City Field Office. “This case highlights that even when complex criminal networks engage in such illegal activities on a global scale from a foreign-based location, without regard for risk to human life, they are still held accountable for their actions in the United States. We commend the United States Attorney’s Office in Colorado and our law enforcement partners for their tireless efforts in connection with the investigation and subsequent prosecution of this case.”

“Combating the shipment of counterfeit pharmaceuticals through the U.S. Mail continues to be a priority for the United States Postal Inspection Service,” said Acting Denver U.S. Postal Inspector in Charge Andrew Balkin. “When the mails are used to ship counterfeit pharmaceuticals it is a violation of Federal Law, and United States Postal Inspectors take this offense seriously. Investigation of this crime displays another successful effort to dismantle criminal enterprises involved in this type of activity.”

Zhou was prosecuted by Assistant U.S. Attorney Kenneth M. Harmon, with assistance from Assistant U.S. Attorney Ryan Bergsieker, District of Colorado.

Story courtesy of U.S. Immigration and Customs Enforcement (ICE) and the IACC (International Anti-Counterfeiting Coalition).

WASHINGTON. As the summer months begin in the United States, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) is keeping the heat on counterfeiters by seizing domain names of websites used to sell counterfeit goods and illegally distribute copyrighted materials. This operation marks the fifth phase of “Operation In Our Sites,” a sustained law enforcement initiative aimed at counterfeiting and piracy over the Internet.

The websites seized during this phase of “Operation In Our Sites” include:

Mygolfaccessory.com

Freshkicks4u.com

Freshcaps4u.com

Watchnewfilms.com

Re1ease.net

During the course of the operation, ICE HSI agents investigated websites suspected of selling counterfeit goods and illegally distributing copyrighted material in the United States. Once the materials were confirmed as counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold or distributed the items were obtained from federal magistrate judges. Individuals accessing the websites will now find a banner notifying them that the domain name of that website has been seized by federal authorities.

“American business is threatened by those who produce counterfeit trademarked goods and pirate copyrighted materials,” said ICE Director John Morton. “From counterfeit pharmaceuticals and electronics to pirated movies, music, and software, IP thieves undermine the U.S. economy and jeopardize public safety. That is why the Operation In Our Sites initiative will continue through 2011 and beyond. Our efforts through this operation successfully disrupt the ability of criminals to purvey counterfeit goods and copyrighted materials illegally over the Internet.”

This nationwide operation was spearheaded by the ICE HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in coordination with U.S. Attorneys’ Offices for the Northern District of California, Southern District of Texas, and Western District of Washington and HSI offices in Houston, San Francisco and Seattle.

In June 2010, ICE HSI and the IPR Center began “Operation In Our Sites.” Since the launch of this operation, ICE HSI and the IPR Center have seized a total of 125 domain names and redirected those domain names to a seizure banner. Seventy-six of the 125 domain names seized have now been forfeited to the United States government. Through the forfeiture process, individuals who have an interest in the seized domain names are provided a period of time after the “Notice of Seizure” to file a petition with a federal court and additional time after the “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become property of the U.S. government.

Last month, the IPR Center launched a public service announcement (PSA) that appears on each of the 76 forfeited domain names. Since the launch of this PSA on ICE’s YouTube page, this video has received nearly 100,000 individual views, educating the public about the economic impact of trademark counterfeiting and copyright infringement. The PSA on forfeited websites is a significant benefit of this enforcement operation in deterring future crimes and in raising awareness.

In December 2010, the New York City Mayor’s Office of Media and Entertainment launched the PSA campaign entitled “Piracy Doesn’t Work in NYC,” which targets digital piracy. The goal of the campaign is to reinforce to the public that the jobs of New Yorkers who work in and support the creative industries in the city are threatened when digital entertainment such as books, movies and songs are illegally downloaded.

“A significant amount of the creative entertainment that gets produced each year is made in New York City whether it’s books, music, films or television shows,” said Katherine Oliver, commissioner of New York City Mayor’s Office of Media and Entertainment. “The City is home to nearly 700,000 New Yorkers who make their living either working in or supporting those creative industries so when people illegally download their entertainment, lost revenue from those actions could mean lost jobs in the City.”

Intellectual property rights violators unfairly devalue America’s contributions, compromise American jobs, and put consumers, families, and communities at risk. They also protect the actor, director, writer, musician, artist, and countless others who labor in and around America’s entertainment industry from having a movie, manuscript, song or design illegally sold by someone who had no part in the artistry of creating it. Intellectual property rights are intended to discourage thieves from selling cheap imitations of products that are often far less safe or reliable than the original products. More importantly, intellectual property rights protect public safety by preventing the proliferation of counterfeit pharmaceuticals and other materials that are potentially harmful.

It is estimated that intellectual property thefts costs American industry billions of dollars and hundreds of thousands of jobs every year. Additionally, “Operation In Our Sites” is also targeting counterfeit pharmaceuticals, software, electronics, games and other products that threaten public health and safety.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center is led by ICE HSI and includes partners from U.S. Customs and Border Protection; FBI; Food and Drug Administration, Office of Criminal Investigations; Postal Inspection Service; Department of Commerce, International Trade Administration; Patent and Trademark Office; Naval Criminal Investigative Service; Defense Criminal Investigative Service; Army Criminal Investigative Command, Major Procurement Fraud Unit; General Services Administration, Office of Inspector General; Consumer Product Safety Commission; Defense Logistics Agency, Office of the Inspector General; Air Force Office of Special Investigations; Department of State, Office of International Intellectual Property Enforcement; INTERPOL; Government of Mexico, Tax Administration Service; and Royal Canadian Mounted Police.

As a task force, the IPR Center uses the expertise of its 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.

To report IP theft, visit www.IPRCenter.gov.