April 9, 2007

Four defendants sentenced in one of New England's largest counterfeit goods conspiracies
Scheme involved more than $1 million in fake handbags and wallets

BOSTON, MA - Four Massachusetts residents have been sentenced in federal court for money laundering, trafficking and conspiring to traffic, in more than $1 million of counterfeit luxury handbags and wallets, as well as the materials needed to make these counterfeits.

"Trafficking in counterfeit goods is not a victimless crime. It is multi-billion dollar theft. By enforcing our nation's counterfeiting laws, ICE is protecting the rights of legitimate businesses and those who play by the rules," said Bruce M. Foucart, special agent in charge of ICE's Office of Investigations in Boston.

"What the public really needs to know is that, often, the illicit funds from trafficking in knock-off and other counterfeit merchandise flows back into the hands of organized criminal enterprises. ICE is committed to aggressively enforcing our nation's intellectual property rights laws by targeting those who profit from the honest hard work of others."

The sentencing was announcement by Massachusetts Assistant Attorney General Alice S. Fisher; U.S. Attorney Michael J. Sullivan of the District of Massachusetts; Special Agent in Charge Bruce M. Foucart of U.S. Immigration and Customs Enforcement (ICE) in New England; and Special Agent in Charge Douglas A. Bricker of the U.S. Internal Revenue Service (IRS), Criminal Investigation in New England.

Minh Vu, 26, of Chelsea, and Kim Luong, 28, of Quincy, were sentenced 2 years and 6 months in prison. Camphung Luoung, 25, of Chelsea, received 2 years in prison, and Katherine Luong, of Chelsea, was sentenced to 3 years in prison.

According to the terms of their plea agreements, the defendants made over $48,000 in restitution payments to the victim companies and did not contest the forfeiture of five bank accounts, over $41,000 in cash, two vehicles and the counterfeit merchandise.

"Intellectual property is one of the United States' most valued resources in the modern world," said U.S. Attorney Sullivan. "Criminals who sell counterfeit merchandise rob legitimate companies of billions of dollars each year, and those who buy the merchandise contribute to the crime. The U.S. Attorney's Office will continue to take strong steps to prosecute those who violate others' trademarks, copyrights, and trade secrets."

At their earlier guilty pleas, Vu and the Luongs admitted that they had rented thirteen self-storage units at a facility in Revere, Massachusetts, as their counterfeiting operation's home base. When searched by law enforcement officers, these storage units held approximately 12,231 counterfeit handbags; 7,651 counterfeit wallets; more than 17,000 generic handbags and wallets; and enough counterfeit labels and medallions to turn more than 50,000 generic handbags and wallets into counterfeits.

These items copied Louis Vuitton, Kate Spade, Prada, Gucci, Fendi, Burberry, and Coach trademarks, but were of lower price and quality. Ten of the storage units were used for storage; two were configured to display items in the open, like showrooms; and one held a work-table and tools that could be used to turn the generic wallets and handbags into counterfeits. Vu and the others sold their counterfeit wallets and handbags at a flea market in Revere, Massachusetts, and to smaller gatherings at approximately 250 "purse parties" throughout Massachusetts.

According to government estimates, the counterfeit and generic handbags and wallets were worth more than $1 million at average counterfeit prices (typically $35 for wallets and $40 for handbags). The storage units also contained numerous counterfeit handbags and wallets of other manufacturers, along with scarves, belts, umbrellas, sunglasses, duffle bags, hats, visors, garment bags, coats, shoes, necklaces, bracelets, rings, and earrings bearing counterfeit marks owned by these and other victim companies.

The case was investigated by Immigration and Customs Enforcement and the U.S. Internal Revenue Service, Criminal Investigation building upon an investigation by the Massachusetts State Police, the Boston Police Department, Revere Police Department, and the Suffolk County District Attorney's Office, which referred the matter for federal prosecution. The case was prosecuted by Assistant U.S. Attorney Adam J. Bookbinder in Sullivan's Computer Hacking and Intellectual Property Unit, and by Senior Counsel Scott L. Garland of the Department of Justice's Computer Crime and Intellectual Property Section of the Criminal Division.

-- ICE --

U.S. Immigration and Customs Enforcement (ICE) was established in March 2003 as the largest investigative arm of the Department of Homeland Security. ICE is comprised of five integrated divisions that form a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities.

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