WASHINGTON—Two Massachusetts residents pleaded guilty today in federal court to money laundering and trafficking and conspiring to traffic in more than $1.4 million of counterfeit luxury handbags and wallets, as well as the materials needed to make these counterfeits. The guilty pleas were announced today by Assistant Attorney General Alice S. Fisher, U.S. Attorney Michael J. Sullivan of the District of Massachusetts, Acting Special Agent-in-Charge Matthew J. Etre of U.S. Immigration and Customs Enforcement (ICE) in New England and Special Agent-in-Charge Douglas Bricker of the U.S. Internal Revenue Service Criminal Investigation in New England.
Minh Vu, age 26, and Katherine Luong, age 27, both of Chelsea, Mass. pleaded guilty today before U.S. District Court Judge William Young. Vu pleaded to eight criminal counts charging conspiracy to traffic in counterfeit goods, conspiracy to commit money laundering and a variety of counts alleging specific instances of trafficking in counterfeit goods and money laundering. Luong pleaded to seven similar charges of conspiracy, money laundering, and trafficking in counterfeit goods. A sentencing date was set for October 26, 2006. The indictment also alleges similar charges against two of Katherine Luong’s sisters, also Massachusetts residents, who are scheduled for trial in October.
“Intellectual property is one of the United States' most valued resources in the modern world,” said U.S. Attorney Sullivan. “My office will continue to take strong steps to prosecute those who abuse others' trademarks, copyrights, and trade secrets.”
At today’s hearing, Vu and Luong admitted that they and Luong’s two sisters used thirteen self-storage units at a facility in Revere, Mass. as their counterfeiting operation's home base. When raided by law enforcement officers last year, 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, Mass., and to smaller gatherings at approximately 230 “purse parties” throughout Massachusetts.
All together, the counterfeit and generic handbags and wallets were worth approximately $1.4 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.
Vu and Luong face maximum sentences on the conspiracy to traffic in counterfeit goods charge of five years in prison and a fine of $250,000 or twice the gain or loss; on the substantive counterfeit goods counts of 10 years in prison, to be followed by three years of supervised release, a $2 million fine, and restitution; and on the money laundering conspiracy and substantive counts of 20 years in prison, to be followed by three years of supervised release and a $500,000 fine. According to the terms of their plea agreements, Vu and Luong will make over $48,000 in restitution payments to the victims and will not contest the forfeiture of five bank accounts, over $41,000 in cash, two vehicles, and the counterfeit merchandise.
The case was investigated by ICE at the Department of Homeland Security and the Internal Revenue Service, building upon an investigation by Massachusetts State Police, the Boston Police Department, and the Suffolk County, Mass. District Attorney’s Office, which referred the matter for federal prosecution. The case is being prosecuted by Assistant U.S. Attorney Adam J. Bookbinder in the District of Massachusetts Computer Hacking and Intellectual Property Unit, and by Senior Counsel Scott L. Garland of the Justice Department’s Computer Crime and Intellectual Property Section.