U.S. shuts down online sellers of counterfeit apparel

   The U.S. Justice Department announced Tuesday that it has seized more than $896,000 in proceeds from the distribution of counterfeit sports apparel and jerseys sold online and seized seven domain names engaged in the sale of fake goods. 
   The investigation of the fraudulent sales is part of Operation In Our Sites, led by the Department of Homeland Security’s Immigration and Customs Enforcement, which targets online retailers of counterfeit goods. Since June 2010, 758 domain names of Websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized.
  Federal law enforcement agents stated in court documents that several subjects whose domain names had been seized in November 2010 continued to sell counterfeit goods using new domain names.  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 fake goods were obtained from federal court.
   According to the government, 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. 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,” Assistant Attorney General Lanny Breuer 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. 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.”
   The Justice Department’s National Intellectual Property Rights Center conducted the investigation along with ICE.
   The Obama administration established an Intellectual Property Task Force to improve coordination between all levels of law enforcement, foreign partners and industry involved in combating the sale of counterfeit imports.
   Congress was prepared to approve legislation giving the government and private companies greater power to take action against U.S. entities that facilitate digital storefronts based abroad that traffic in fake merchandise and sales of legitimate goods skimmed off the production line. The Websites, which appear normal, tend to attract unsuspecting consumers looking for good deals. Congressional leaders indefinitely postponed a vote after a massive digital protest organized by Wikipedia and other technology companies that expressed concern the legislation would create a chilling effect on innovation and online business opportunities. — Eric Kulisch