I.C.E. Seizes $896,000 from Chinese Companies

I.C.E. News Release

April 10, 2012
Washington, DC

More than $896,000 in proceeds seized from the online sale of counterfeit sports apparel manufactured in China

WASHINGTON — U.S. Immigration and Customs Enforcement (ICE) led National Intellectual Property Rights Coordination Center (IPR Center) and the Department of Justice seized more than $896,000 in proceeds from the distribution of counterfeit sports apparel as the result of an investigation into the sale of counterfeit goods on commercial websites. The investigation also resulted in the seizure of seven domain names engaged in the sale of counterfeit goods. The funds were seized from interbank accounts and three PayPal accounts.

The investigation by ICE's Office of Homeland Security Investigations (HSI) is a result of Operation In Our Sites, which targets online commercial intellectual property crime, and began in June 2010. Operation In Our Sites targets online retailers for a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 758 domain names of websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

"Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation," said ICE Director John Morton. "Consumers are at risk, American industry is harmed and U.S. jobs are lost. As a country, we can ill afford the toll that intellectual property theft exacts on our economy and industries. Operation In Our Sites and the related efforts of the National Intellectual Property Rights Coordination Center are critical to combating intellectual property crime and consumer fraud over the Internet."

According to court documents, investigation by federal law enforcement officers revealed that several subjects whose domain names had been seized in a November 2010 through Operation In Our Sites continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement officers made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for seven domain names used to sell the goods were obtained from a U.S. magistrate judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using PayPal accounts and then wired their proceeds to bank accounts held at Chinese banks. Pursuant to warrants issued by a U.S. district judge, law enforcement officers seized $826,883 in proceeds that had been transferred from PayPal accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese banks in the United States. Pursuant to additional seizure warrants issued by a U.S. magistrate judge, law enforcement officers also seized $69,504 in funds remaining in three PayPal accounts used by the subjects.

"We are working hard to protect American businesses and consumers from the damaging effects of intellectual property crime," said Assistant Attorney General Breuer. "This investigation disrupted an online counterfeit goods operation, and also struck at the heart of the criminal enterprise by seizing hundreds of thousands of dollars in illegal profits. The Justice Department, together with our partners at ICE, will continue to do all that we can to punish and deter the sale and distribution of counterfeit goods."

"Those who traffic in counterfeit goods harm the American economy as well as the consumers who purchase the substandard merchandise," said U.S. Attorney Machen. "Seizing the domain names of these unscrupulous operators was one big step, and seizing their ill-gotten proceeds should send them another message that these counterfeit sales will not be tolerated."

The investigation was conducted by the IPR Center and HSI. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas, and Special Assistant U.S. Attorney Katharine Wagner of the District of Columbia; Senior Trial Attorney Pamela Hicks of the Asset Forfeiture and Money Laundering Section in the Justice Department's Criminal Division; and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department's Criminal Division.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

HSI manages the IPR Center in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

To report IP theft or to learn more about the HSI-led IPR Center, visit Our Partner Agencies — National Intellectual Property Rights Coordination Center.

U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the Department of Homeland Security.

ICE is a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities. For more information, visit U.S. Immigration and Customs Enforcement. To report suspicious activity, call 1-866-347-2423 or complete our tip form.

U.S. Dept of Homeland Security

More than $896,000 in proceeds seized from the online sale of counterfeit sports apparel manufactured in China

Apr 10, 2012 11:10 am

ICE, DOJ Seize More Domain Names of Sites Accused of Selling Counterfeits

By Grant Gross, IDG News

The U.S. Department of Justice and U.S. Immigration and Customs Enforcement have seized more than US$896,000, plus the domain names of seven websites accused of selling counterfeit sports apparel, the two agencies announced Tuesday.

The sellers, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit jerseys, the agencies said ins a news release. The agencies, after making undercover purchases from the sites, received seizure warrants from a magistrate judge from the U.S. District Court for the District of Columbia.

The seizure warrants were unsealed on Thursday.

Since June 2010, the two agencies have seized 758 domain names of websites accused of selling counterfeit products, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. ICE's Office of Homeland Security Investigations launched Operation In Our Sites, focused on websites selling counterfeit products, in mid-2010.

Several subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names, the agencies said. This operation targeted those websites.

The website operators processed payments for the counterfeit goods using PayPal Private Ltd. accounts and then wired their proceeds to bank accounts held at Chinese banks, the agencies said.

Through the warrants, law enforcement agents seized $826,883 that had been transferred from PayPal accounts to bank accounts in China. The funds were seized from interbank accounts held by the Chinese banks in the U.S.

Under additional seizure warrants, law enforcement agents also seized $69,504 in funds remaining in three PayPal accounts used by the website operators.

"We are working hard to protect American businesses and consumers from the damaging effects of intellectual property crime," Lanny Breuer, assistant attorney general in the DOJ's Criminal Division, said in a statement. "This investigation disrupted an online counterfeit goods operation and also struck at the heart of the criminal enterprise by seizing hundreds of thousands of dollars in illegal profits."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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