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Justice News

Department of Justice
U.S. Attorney’s Office
District of New Mexico

FOR IMMEDIATE RELEASE
Thursday, August 27, 2020

Purveyors of fraudulent Native American-style goods and products sentenced in federal court

            ALBUQUERQUE, N.M. – Jawad Khalaf, 72, of Albuquerque, New Mexico, Nashat Khalaf, 73, of Gallup, New Mexico, Sterling Islands, Inc., a wholesale jewelry business in Albuquerque, and Al-Zuni Global Jewelry, Inc., a wholesale jewelry business in Gallup, were sentenced in federal court in Albuquerque yesterday. In April, the defendants pled guilty to misrepresentation of Indian-produced goods and services in an amount greater than $1000 as part of a scheme to import Native American-style jewelry from the Philippines and sell it to customers in the United States as authentic.  Another defendant, Taha Shawar, 49, of Breckenridge, Colorado, remains a fugitive.

            Jawad Khalaf and Nash Khalaf were sentenced to 2 years’ supervised release and Jawad Khalaf must also perform 100 hours of community service. Sterling Islands Inc. was sentenced to 5 years’ probation and 50 hours community service, while Al-Zuni Global Jewelers, Inc. was sentenced to 5 years’ probation and 20 hours community service. Collectively, the defendants will pay $300,000 to the Indian Arts and Crafts Board and forfeit their interests in $288,738.94 seized by investigators in the case.

            A grand jury returned an indictment on Dec. 19, 2018, charging these defendants and three other people with conspiracy, smuggling goods into the United States and misrepresentation of Indian-produced goods and products. The defendants admitted that on Oct. 28, 2015, they displayed and offered for sale miniature canteens at Al-Zuni Global Jewelry in Gallup.  These canteens were not actually Indian-produced but could have reasonably been mistaken for authentic Indian-produced canteens.

            “I want to express my appreciation for the hard work of the investigators and prosecutors who brought this case to conclusion,’ said John C. Anderson, U.S. Attorney for the District of New Mexico. “It is the culmination of countless hours of diligent work and cooperation among our partnering law enforcement agencies on behalf of Native American artists and artisans. We stand ready to bring the power of the law to bear upon those seeking to profit from cultural theft.”

            “This U.S. Fish and Wildlife Service-led investigation uncovered a transnational criminal scheme that defrauded U.S. consumers and Native American artists,” said Assistant Director of the Office of Law Enforcement Edward Grace. “I would like to thank our special agents for their exemplar investigative work as well as our state and federal partners, who because of their collaboration and dedication to duty, these defendants were sentenced yesterday.”

            “The Land of Enchantment’s identity and economy relies heavily on Indian art and culture,” said Meridith Stanton, Director of the Indian Arts and Crafts Board (IACB), U.S. Department of the Interior. The IACB by statute is responsible for enforcement of the Indian Arts and Crafts Act, which includes criminal penalties for marketing counterfeit Indian art and craftwork, to protect the economic livelihoods of Indian artists and artisans.

            “Consumers must have confidence that the ‘Indian art’ they are purchasing in New Mexico is authentic, and not imported from factories in the Philippines,” said Director Stanton.  “At the same time, Indian artists and economies must be protected from unfair competition from counterfeit Indian art. Robust Indian Arts and Crafts Act enforcement ensures that Indian artistic traditions can be passed down from one generation to the next to preserve an important American treasure – authentic Indian art. The Board commends our colleagues at the Office of the U.S. Attorney for the District of New Mexico and the U.S. Fish and Wildlife Service’s Office of Law Enforcement for their extraordinary dedication, diligence, and commitment in working with us to combat the sale of counterfeit Indian art.”

            “The FBI hopes this case sends a loud and clear message that those who try to cheat Native Americans of their cultural heritage will be held accountable,” said James C. Langenberg, Special Agent in Charge of the FBI’s Albuquerque Field Office. “We will continue working closely with our partners to make sure our nation’s precious artistic resources are protected.”

            “These individuals conspired to exploit the rich culture and work of Indian artisans for their personal gain by selling counterfeit merchandise and passing it as genuine Indian art and craftwork,” said Erik P. Breitzke, acting Special Agent in Charge of Homeland Security Investigations (HIS) El Paso. “This sentence sends a powerful message to others who believe they can do the same and elude justice. HSI will continue to cooperate with our law enforcement partners to assist in protecting and preserving Native American cultural heritage.” 

            “Yesterday’s sentencing marks a turning point in this case and provides some closure to those who were victimized by this unfair practice,” said Sonya K. Chavez, U.S. Marshal for the District of New Mexico. “This collaboration affirms law enforcement’s commitment to pursuing those who believe they can get away with fraud against our state and our unique cultural resources.”

            “The Department of Game and Fish is proud to have been an integral part of this multi-jurisdictional prosecution,” said New Mexico Department of Game and Fish director Michael Sloane. “We take pride in both conserving wildlife and protecting the diverse cultures of New Mexico. We congratulate our partners on a job well done.”

            The Office of Law Enforcement for the Southwest Region of the U.S. Fish and Wildlife Service led the investigation of this case with assistance from the Albuquerque Division of the FBI, Homeland Security Investigations, the Indian Arts and Crafts Board, the Drug Enforcement Administration, the U.S. Marshals Service, and the New Mexico Department of Game and Fish.  Assistant U.S. Attorneys Jonathon M. Gerson, Sean J. Sullivan, Kristopher N. Houghton, and Stephen R. Kotz prosecuted the case.

Topic(s): 
Securities, Commodities, & Investment Fraud
Indian Country Law and Justice
Press Release Number: 
20-145
Updated August 27, 2020