Virginia Man Pleads Guilty to Trafficking in Counterfeit GM Diagnostic Equipment
A Virginia man pleaded guilty today in federal court to selling counterfeit General Motors (GM) automotive diagnostic devices used by mechanics to identify problems with and assure the safety of motor vehicles, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and FBI Assistant Director Joseph Demarest.
Justin DeMatteo, 31, of Saxe, Va., pleaded guilty before Senior U.S. District Judge Claude M. Hilton in U.S. District Court in the Eastern District of Virginia to an information charging him with one count of trafficking in goods bearing counterfeit marks. DeMatteo, in a plea agreement with the government, also agreed to pay restitution of $328,500 (the full amount of GM’s losses) and forfeit $109.074 and all facilitating property and contraband seized during the execution of search warrants at his business and home on Dec. 15, 2011 . Sentencing is scheduled for Jan. 11, 2013.
In court documents, DeMatteo admitted he sold counterfeit GM Corporation-branded “Tech 2” vehicle diagnostic systems between January and May 2011. The Tech 2 is a hand-held computer used to diagnose problems in vehicles that use electronic controls and interfaces. For newer vehicles, GM designed a new diagnostic interface – the Controller Area Network diagnostic interface (CANdi) module, which serves as an enhancement to the Tech 2 and completes the interface necessary to communicate with future on-board computer systems.
DeMatteo also admitted he offered for sale purported Tech 2 units and CANdi modules that bore counterfeit GM marks. DeMatteo sold the counterfeit Tech 2 units on eBay and accepted payment via Paypal. DeMatteo purchased the units from unauthorized manufacturers in the People’s Republic of China (PRC) and in many cases had them drop-shipped directly from the PRC to U.S. customers. On Dec. 15, 2011, federal agents executed search warrants at DeMatteo’s residence in Saxe and place of business in South Boston, Va. Among other things, agents seized numerous counterfeit GM Tech 2 units and CANdi modules, and various computer equipment and documents that contained evidence linking DeMatteo to the sale of the counterfeit Tech 2 units. According to the stipulated statement of facts and plea agreement, the number of Tech 2 and CANdi units sold by DeMatteo or seized during the searches totaled nearly 100. The retail price of 100 authentic products would have been more than $380,000.
The case was prosecuted by Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and was investigated by the FBI’s Intellectual Property Rights Unit.