Four Defendants Arrested in Multimillion-Dollar Counterfeit Goods Trafficking Scheme
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More Than $130 Million Scheme Included Fake UGG Boots, Nike Air Jordan Sneakers, Timberland Boots and Beats Headphones
A 14-count indictment was unsealed yesterday in federal court in Brooklyn charging seven defendants with participating in a counterfeit goods scheme in which they imported generic goods into the United States from China, applied brand labels to those goods in workshops, some of which were controlled by the defendants, and then sold those counterfeit-branded goods to retail and wholesale purchasers. The charges against the defendants include conspiracy to traffic and trafficking in counterfeit goods and money laundering. Four defendants were arraigned yesterday before United States Magistrate Judge Sanket J. Bulsara and each was released on a $200,000 bond. Three additional defendants remain at large.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Dermot Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and indictment.
“As alleged, the defendants trafficked in counterfeit merchandise that they fraudulently branded as genuine to pass off to purchasers in the United States at a purported retail value of more than $130 million,” stated Acting United States Attorney Kasulis. “This Office and its law enforcement partners are committed to protecting consumers from paying retail prices for phony merchandise and to holding defendants accountable for their greed.” Ms. Kasulis extended her grateful appreciation to the HSI Intellectual Property Group, the HSI Border Enforcement Security Task Force and the NYPD. Ms. Kasulis also extended her thanks to U.S. Customs and Border Protection for its assistance.
“HSI New York’s Border Enforcement Security Taskforce stands at the forefront of the fight against criminal organizations who identify weaknesses in our supply chain and infiltrate them for their personal financial gain,” stated HSI Special Agent-in-Charge Fitzhugh. “In addition to their detrimental effect to our economy, counterfeiting networks such as this one poses a threat to our national security and public safety by introducing products that often contain harmful materials and substances. HSI and CBP are uniquely positioned to combat these organizations and, along with our partners at the New York City Police Department, will work tirelessly to protect New York City and the Homeland.”
As alleged in the indictment, between October 2019 and July 2021, the defendants participated in an international scheme to traffic counterfeit goods. The defendants first imported the goods in generic form from China into the Port of New York and New Jersey. The goods were then delivered to workshops and storage facilities controlled by some of the defendants in Queens and on Long Island. In those workshops, insignias, emblems, trademarks and other brand signifiers were applied to the generic goods, converting them into purported brand name merchandise. These counterfeit goods were then sold as a part of the scheme directly to consumers and to wholesale buyers. The estimated retail value of the counterfeit-branded goods, had they been genuine, was in excess of $130 million.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Dylan A. Stern and Benjamin L. Weintraub are in charge of the prosecution. Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters in the case.
HAI LONG ZHOU (also known as “Zangkun Zhou”)
Queens, New York
Brooklyn, New York
YAN XUE HUANG (also known as “Yan Xue Zhou” and “Yan Xue Li Ming”)
Queens, New York
JIAN FEN YANG
Queens, New York
E.D.N.Y. Docket No. 21-CR-417 (SJ)