WASHINGTON — Federal officials said Friday they had broken up a multimillion-dollar counterfeit ring with ties in Baltimore, New York, London, Malaysia and China.
The U.S. Attorney for the District of Maryland and U.S. Immigration and Customs Enforcement charged nine defendants with smuggling more than 630,000 counterfeit Gucci, Coach, Cartier and Nike items such as shoes, handbags and watches worth an estimated $33 million into the U.S. through the Port of Baltimore.
In a related case, authorities in London said Friday they had arrested six individuals and seized 50,000 counterfeit Gucci, Ugg, Versace, Ralph Lauren, Nike and Adidas items at 30 locations in the greater London area in what they said was one of the largest counterfeit busts in U.K. history.
“Criminal organizations that smuggle and sell counterfeit goods in the United States endanger our economy and rob legitimate industries of their business,” said John Morton, assistant secretary with U.S. Immigration and Customs Enforcement, also known as ICE.
Rod Rosenstein, U.S. Attorney for the District of Maryland, said, “Intellectual property crimes are among the Justice Department’s top white-collar enforcement priorities.”
The indictment includes 72 counts of conspiracy, smuggling, trafficking in counterfeit goods and money laundering. The defendants began conspiring in March 2008, according to court documents.
The U.S. defendants face maximum five-year sentences for conspiracy, up to 20 years in prison on each of the 33 smuggling charges, up to 10 years for each count of trafficking in counterfeit goods and a maximum of 20 years on five money laundering counts, in addition to monetary fines in the millions of dollars. Two of the defendants were arrested on Wednesday, six were arrested Thursday and one suspect is at large.
The conspirators allegedly imported goods manufactured in Malaysia and China into the U.S., according to the indictment. To get the goods cleared through Customs for sale in the U.S., the defendants made contact with individuals who, unknown to them, were undercover ICE agents.
The undercover ICE agents documented 33 occasions between May 2008 and December 2009 when the members of the smuggling ring allegedly directed shipments of counterfeit goods through the Port of Baltimore. Goods were either transferred to locations in New York and New Jersey or they were picked up in Maryland.
The London investigation was a result of cooperation between City of London Police, the U.K. Border Agency and ICE. It is ongoing. ICE said it had tracked the movement of shipping containers that were used to smuggle counterfeit goods from China to the U.S. and U.K., which lead to the arrests in both cities. One of the defendants charged in Baltimore allegedly arranged to have money wired to undercover agents for three containers that were to be shipped to England. The same defendant also allegedly met with undercover agents in England to discuss expansion of the counterfeit smuggling operation.
“Nike is grateful for the diligence and hard work that the agents of Immigration and Customs Enforcement have demonstrated throughout this investigation,” said Lori Colbert, North America brand protection manager for Nike Inc. “Their commitment to ending the flow of counterfeit goods across borders has been unwavering.”
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