Jury Convicts Importers in Major Counterfeit Case

Jury Convicts Importers in Major Counterfeit Case

A federal jury in Richmond, Va., convicted two New York handbag importers in what the Department of Justice says is “one of the largest counterfeit goods prosecutions in U.S. history.”

The DOJ said the defendants imported more than 300,000 knockoff luxury handbags and wallets, and that the genuine articles were valued at more than $100 million. The authentic goods carried brand names of Burberry, Louis Vuitton, Gucci, Coach, Fendi and Chanel, the government said.

Federal officials said the jury after a weeklong trial found Chong Lam, 52, and Siu Yung Chan (also known as Joyce Chan), 42, each guilty on one count of conspiracy to traffic in counterfeit goods imported from China; two counts of trafficking in counterfeit handbags, wallets, purses and carry-on bags; and two counts of illegally smuggling counterfeit goods into the United States.

A third defendant, Eric Yuen, 41, was originally charged with Lam and Chan in January 2008 but was found not guilty on all counts in the June 10 verdict.

John Morton, assistant secretary for Immigration and Customs Enforcement at the Department of Homeland Security, said it is a "landmark conviction (that) represents the latest success of ICE in targeting intellectual property thieves."

It is also the latest effort by the administration to clamp down on international trade violations of U.S. law. Last month, the Environmental Protection Agency said retailer Pep Boys would pay $5 million in civil penalties under a settlement agreement, in the largest EPA case involving vehicle and engine imports that violate the Clean Air Act.

In the counterfeit case, the DOJ said “Lam and Chan and their co-conspirators operated a massive international manufacturing, import and wholesale counterfeit goods business.” That enterprise included at least 13 different companies and eight factories to make the products.

The government said Customs and Border Protection agents “seized numerous containers of counterfeit luxury handbags and wallets imported from China” from 2002 through Oct. 31, 2005.

An ICE investigation, which included a review of documents filed with CBP, determined that Lam and Chan imported over 300,000 counterfeit luxury bags and wallets from China under different companies they controlled. In January 2008, investigators executed search warrants at the Manhattan address of the defendants’ business, Coco USA, and seized about 1,500 cartons of the items.

Sentencing, scheduled for Sept. 15, could include both prison terms and large fines.

-- Contact John D. Boyd at jboyd@joc.com.