COUNTERFEIT CHARGES FOR FAKEGIFTS DUO
Byline: Vicki M. Young
NEW YORK — Two residents of Lancaster, S.C., were arrested last week in connection with a federal grand jury indictment charging them with trafficking in luxury goods that bore counterfeit trademarks, such as Rolex and Cartier watches, over a Web site.
Mark DiPadova, 35, and Theresa Gayle Ford, 36, were charged with one count of conspiracy and three counts of trademark infringement, as well as one count of making false statements to federal agents in connection with the investigation. The indictment, according to Dean Eikelberger, the Assistant U.S. Attorney in Columbia, S. C., who is handling the case, was returned by the grand jury on Jan. 17. The two, who operate a Web site called Fakegifts.com, were arrested on Jan. 22. Eikelberger said Ford was released on Jan. 23 on a $100,000 unsecured bond, while DiPadova will remain in pretrial detention custody in a local jail until he makes bail on a $100,000 fully secured bond.
Simon Critchell, chairman of Cartier Inc., told WWD that the arrests followed nearly a yearlong investigation by the Cartier and Montblanc brands. “As a general practice, we watch all of the Web sites to check for counterfeiting. This was the most obvious and flagrant one. It is important for us to send a message to all parties that we take this very seriously. We are tracking in our retail outlets, on the street and over the Internet. We are committed to protecting the reputation of our brand name and merchandise and we will continue to pursue others who fraudulently use our brand name,” he said.
According to Cartier, DiPadova posted a message on the Web site which read: “I’m my own internet-service provider. They [brand owners] can’t serve me if they can’t find me. And even if they do shut down one site, I’ll put up another. I’m very much aware of what I’m doing, but the money is so good, I’m going to keep doing it.”
On a visit to the Fakegifts.com site last week, it lists for sale “replica” watches from Breitling, Cartier, Chopard and Tag Heuer. One watch, a Cartier with a stainless steel band, sells for $650. Handbags sold on the site are advertised as replicas of designs from Coach, Fendi, Gucci, Kate Spade & Louis Vuitton.
Fakegifts.com’s Web site said that the company has been in operation since 1998, and brags that it carries “over 1000 different ready-to-order products and styles.” The company even cautions visitors about other alleged fraud scams committed against Fakegifts.com.
Neither Ford nor DiPadova could be reached for comment.
Marc Frisanco, in-house legal counsel for Cartier in Geneva, told WWD last week, “It is difficult to make an assessment about the number of products available online that are fakes. However, from the monthly surveys we conduct on a regular basis, the number is quite sizable.”
According to Frisanco, the counterfeiting of goods sold online is potentially a greater problem logistically for trademark owners than when the fake counterparts are sold on the street.
He explained: “It is more difficult to check and investigate first whether the product is genuine or not. If you find out that it is a fake, you then have to find the site, locate the operator and learn how the product is distributed. It is tough to enforce your right when so much of this is done anonymously. Even if you find out the information, it is still very difficult because the laws that are existing [in the different countries] are not always able to tackle counterfeiting on the Internet.”
George Arnold of George Arnold & Associates in North Carolina, whose firm worked on the investigation in conjunction with agents from the U.S. Customs Service, declined specific comment on the ongoing DiPadova matter, but noted that tracking offenders who operate online can be very difficult. “Other than what you can buy on the Web site, everything else is smoke and mirrors. Everyone is hiding behind firewalls.”
He pointed out that an online counterfeiter is usually a different type of operator from those who sell fakes on the street. “It’s all done by shipping through some of the carriers. The characters on the Internet are taking orders, buying from places on the street and elsewhere. Many sites make no bones about selling a copy or replica.
According to the U.S. Attorney’s Office, Ford and DiPadova — if found guilty — each face a maximum fine of $250,000 and/or five-year imprisonment term for the conspiracy charge. On the three trademark infringement counts, each defendant faces up to $2 million in fines and/or 10 years imprisonment for each count. The false statement count subjects each defendant to a fine of $250,000 and/or a 5-year jail term.
Eichelberger noted that, absent any delays, jury selection could begin within 70 days. He declined to comment on whether there would be any other arrests.