Federal agents arrested eight people on counterfeiting charges Thursday and seized 1,113 boxes of fake goods, such as apparel under the Tommy Hilfiger, Izod, Lacoste and Disney names, in a raid on a Queens, N.Y., warehouse.
The haul from the ZX Trading Corp. facility at 18-28 Troutman Street in the Ridgewood section, which included unspecified designer handbag labels, filled two 40-foot trailer trucks.
The raid was part of a case that started in 2000 and included surveillance and undercover operations, said Peter J. Smith, the Immigration and Customs Enforcement special agent in charge of the New York City area.
Law enforcement authorities, who did not put a dollar value on the goods, will analyze what was seized and see where it might lead them.
"They're still going through it all," Smith said in an interview. "We won't complete this for a couple of days."
The goods were intended to be sold in the New York City area and probably came from China, he said. Information from the raid will be shared with U.S. officials in China.
The suspects were identified as Yun Zhou Zhang, Jian Rong Jiang, Lin Hu, Jian Wang, Hoy Mui Cheow, Jian Hu, Ke Liang Qu, Yong Qiang Huang and Lin Kun Guan, according to a pair of federal complaints. Eight of the nine were arrested. Three were released on bonds ranging from $50,000 to $100,000. One suspect, Hoy Mui Cheow, was held without bail and four were to be arraigned today.
The investigation that led to Queens first made its way through Lynchburg, Va., where the Campbell County sheriff's department in 2005 seized $296,930 worth of counterfeit goods, including fake Rolex watches and Louis Vuitton handbags. Some of the items were supplied by ZX, according to a federal complaint.
"You take a little piece of information and keep building on it," Smith said. "You do your surveillances, you make your purchases, you get your seizures at the border, you run money through their bank accounts to see where it comes back to. A lot of legwork went back to this."
ZX could not be reached for comment.Building cases against suppliers is a more effective way of fighting counterfeiting than cracking down on the street vendors, he said.
"You're getting the biggest bang for your buck," Smith said.
The raid will have an impact locally, but other counterfeiters are poised to move in. "There are people waiting to fill that vacuum," Smith said.
Trade groups and others estimate that counterfeiting and piracy cost the U.S. economy $200 billion to $250 billion a year and that 5 to 8 percent of all goods sold worldwide are counterfeit, according to the ICE.
Counterfeiting has increasingly vexed the industry, lowered profits and drawn the attention of law enforcement. ICE and U.S. Customs and Border Protection seized about $200 million worth of counterfeit or pirated goods last fiscal year, an increase of 27 percent over the previous year.
In another case, ZX is in a legal battle with Marvel Entertainment Inc., owner of crime-fighting superhero names including Spider-Man. Marvel sued ZX in U.S. District Court in Brooklyn in April, alleging the company manufactured, distributed and sold unauthorized goods that featured its popular web-slinging hero and the Marvel name.
"Defendants have infringed and threaten to further infringe [upon] the Marvel marks and copyright by manufacturing, distributing and selling unauthorized merchandise, including but not limited to toys, clothing and accessories," according to the federal complaint.
The suit included charges of trademark counterfeiting and infringement, false designations of origin, trademark dilution and injury to business reputation, among others.
Marvel asked the court to enjoin ZX from infringing on the firm's marks and copyrights and to have the unauthorized goods and advertisements destroyed. The company is also seeking unspecified damages.
An initial conference in the case is scheduled to be held before U.S. Magistrate Judge Kiyo Matsumoto in July.
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