The Department of Justice has seized more than $896,000 in proceeds from the sale of Chinese-made counterfeit sports apparel and jerseys as the result of an investigation into the sale of bogus goods on commercial websites.
The investigation also resulted in the confiscation of seven domain names engaged in the sale of counterfeit goods. The funds were seized from interbank accounts and three PayPal accounts.
The investigation is a product of Operation In Our Sites, an enforcement initiative targeting online commercial intellectual property crime announced by ICE’s Office of Homeland Security Investigations (HSI) in June 2010. Operation In Our Sites targeted online retailers 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 because of Operation In Our Sites.
According to court documents, investigation by federal law enforcement agents revealed that 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.
Specifically, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement agents 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 infringing goods were obtained from a U.S. Magistrate Judge in U.S. District Court for the District of Columbia.
According to court documents, the individuals conducted sales and processed payments for the counterfeit goods using PayPal Private Ltd. accounts and then wired their proceeds to bank accounts held at Chinese banks.
Under warrants issued by a U.S. District Judge, law enforcement agents 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. Under additional seizure warrants issued by a U.S. Magistrate Judge, law enforcement agents 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 Lanny A. Breuer of the Justice Department’s Criminal Division, in a release.