BUFFALO, N.Y. (WKBW/Release) - U.S. Attorney William J. Hochul, Jr. announced today that Xiao Cheng Lin, 50, and his wife, Ling Zhen Hu, 51, both of New York City, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to import mis-classified merchandise.
The charge carries a maximum penalty of five years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that defendant Hu, a native of China, worked for an individual who imported thousands of pairs of sneakers from China that bore the Nike logo ("swoosh") and Nike labeling but were not genuine Nike sneakers.
Hu then negotiated the sale of large quantities of the mislabeled sneakers to Malik Bazzi, who sold them to customers throughout the United States, including in Buffalo. Defendant Hu admitted that she negotiated the sale of 7,500 pairs of sneakers to Bazzi.
Defendant Lin, also a native of China, worked with his wife, delivering the 7,500 pairs of sneakers to Bazzi. The investigation revealed that Bazzi's customers then sold the counterfeit Nike sneakers on the street and in retail stores to customers for about half the price of genuine Nike sneakers.
As part of their plea agreements, both Lin and Hu agreed to abandon any claim to over $600,000 and dozens of pairs of counterfeit sneakers seized from their New York City residence following their arrest in 2007.
The defendants were arrested along with 21 others. To date, 20 of the defendants have been convicted.
On September 5th, 2012, defendant LaKeith Fowler, 32, of Dallas, Texas, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Fowler, one of Malik Bazzi's customers, purchased and sold approximately 12,000 pairs of counterfeit Nike sneakers he obtained from Bazzi in April through September, 2007.
Fowler sold the sneakers in a retail store he owned in the Dallas area. As part of his plea agreement, Fowler agreed to forfeit two bank accounts to the government which contain over $44,000 in deposits. The accounts were used to conduct counterfeit sneaker transactions.
On September 7th, 2012, Davion Briant, 37, of Milwaukee, Wisconsin, also pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Briant, another of Malik Bazzi's customers, purchased and sold approximately 4,500 pairs of counterfeit Nike sneakers he obtained from Bazzi in April through September, 2007.
Briant owned a retail store in the Milwaukee area where he sold the counterfeit sneakers.
On September 10th, 2012, Hussien Sara, 30, of New York City, New York, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Sara worked in Bazzi's warehouses in Manhattan and Brooklyn, N.Y., where, on behalf of Bazzi, he took delivery of over 13,000 pairs of counterfeit sneakers from several suppliers, including defendants Hu and Lin.
In addition, Sara assisted in packaging the sneakers for shipment to Bazzi's customers located through the United States.
"The trademark laws in the United States were created to protect the investment of American manufacturers such as Nike as well as consumers," said U.S. Attorney Hochul.
"These laws are designed to create a level playing field for businesses and protect consumers who might unwittingly purchase inferior counterfeit goods. Our Office will continue to aggressively enforce customs laws for the benefit of American businesses and those who purchase their products."
"Selling counterfeit goods is stealing," said James C. Spero, Special Agent in Charge of HSI Buffalo.
"HSI is committed to ensuring the legitimate copyright holders are protected from individuals who are only motivated by greed. People and organizations which produce and sell counterfeit products undermine the U.S. economy, create inferior and sometimes dangerous products, and jeopardize public safety."
The plea is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge.
Xiao Cheng Lin and Ling Zhen Hu will be sentenced on January 24, 2013; LaKeith Fowler on December 14, 2012; Davion Briant on January 7, 2013; and Hussien Sara on January 11, 2013, all before Judge Arcara.