Four Defendants Arrested in Multimillion-Dollar Counterfeit Goods Trafficking Scheme | USAO-EDNY

A 14-point indictment was unsealed yesterday in Brooklyn federal court accusing seven defendants of participating in a counterfeit goods program in which they imported generic medicines from China to the United States and put branded labels on those goods in workshops some of which were controlled by the defendants and sold these counterfeit branded items to retail and wholesale buyers. The charges against the defendants include conspiracy to trade and trade in counterfeit goods and money laundering. Four defendants were tried yesterday before US Judge Sanket J. Bulsara and each was released on a loan of $ 200,000. Three other defendants remain at large.

Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent in Charge, Homeland Security Investigations, New York (HSI), and Dermot Shea, Commissioner, New York City Police Department ( NYPD), announced the arrests and indictments.

“The defendants allegedly traded counterfeit goods, which they fraudulently identified as genuine, in order to sell them to buyers in the United States with an alleged sales value of more than $ 130 million,” said acting US attorney Kasulis . “This agency and its law enforcement partners pledge to protect consumers from paying retail prices for counterfeit goods and hold the defendants accountable for their greed.” Ms. Kasulis spoke to the HSI Intellectual Property Group, the HSI Border Enforcement Security Task Force and their grateful appreciation to the NYPD. Ms. Kasulis also thanked US Customs and Border Protection for their assistance.

“HSI New York’s Border Enforcement Security Taskforce is at the forefront of the fight against criminal organizations who identify vulnerabilities in our supply chain and infiltrate them for their personal financial gain,” said HSI Special Agent-in-Charge Fitzhugh. “In addition to damaging our economies, counterfeit networks like this pose a threat to our national and public security by introducing products that often contain harmful materials and substances. HSI and CBP are uniquely positioned to combat these organizations and will work tirelessly with our partners in the New York Police Department to protect New York City and the homeland. “

As alleged in the indictment, the defendants participated in an international program to trade counterfeit goods between October 2019 and July 2021. The defendants initially imported the goods in generic form from China into the ports of New York and New Jersey. The goods were then delivered to workshops and storage facilities controlled by some of the defendants in Queens and Long Island. In these workshops, badges, emblems, trademarks and other trademarks were applied to the generic goods and converted into supposedly branded items. These counterfeit goods were then sold directly to consumers and bulk buyers under the scheme. The estimated retail value of the counterfeit branded items, if they were genuine, was over $ 130 million.

The government’s case is handled by the Bureau’s General Crimes Department. US assistant attorneys Dylan A. Stern and Benjamin L. Weintraub are in charge of the indictment. Assistant US Attorney Tanisha Payne from the Office’s Asset Recovery Department is handling confiscation matters in this case.

The defendants:

HAI LONG ZHOU (also known as “Zangkun Zhou”)
Age: 53
Queens, New York

SAIYIN HOU
Age: 25
Brooklyn, New York

YAN XUE HUANG (also known as “Yan Xue Zhou” and “Yan Xue Li Ming”)
Age: 50
Queens, New York

JIAN FEN YANG
Age: 57
Queens, New York

EDNY File No. 21-CR-417 (SJ)