Chula Vista Corporate Officers Guilty Of International Trafficking In Counterfeit Cell Phones
SAN DIEGO - Three corporate officers of Chula Vista-based Ohr, Inc., as well as the corporation itself, pleaded guilty yesterday to charges related to their international trafficking in counterfeit cell phones.
In pleading guilty, Michael Deitz, Sidney Schwarz, and Leora Schwarz admitted that they were officers of Ohr, Inc., from August 29, 2009, through May 31, 2013. The company was engaged in importing cellular phones and accessories from Taiwan to Chula Vista, which were later sold in retail stores in Mexico.
Deitz admitted that he was responsible for ordering the products sold by Ohr, Inc., while Sidney Schwarz acknowledged he was responsible for paying the suppliers. Deitz and Sidney Schwarz admitted that many of the cellular phones and accessories imported from China for Ohr, Inc., were counterfeit, in that they bore unauthorized copies of trademark owned by Apple, Samsung, Motorola, Nokia, Sony Ericsson and Blackberry, among others. They further admitted that they received at least nine notices from U.S. Customs, advising that the products they had imported were counterfeit and had been seized during the relevant period.
After learning that the source was supplying them with counterfeit goods, Deitz and Sidney Schwarz continued to do business with the supplier. Deitz also acknowledged that he received emails from his suppliers in China, discussing “illegal logos” and “copy logos” in relation to the cellular phone products he was purchasing, which he forwarded to Schwarz for payment of the attached invoices.
Deitz admitted in his plea agreement that he was aware that the items identified in the invoices as “copy,” “copy logo,” and “AAA” were counterfeit, and that all the cell phone housings and batteries that he purchased from China bearing trademarks were counterfeit. Both men and the company admitted that on August 9, 2011, Customs seized a box of goods ordered by Deitz on behalf of Ohr, Inc., and addressed to Schwarz’s residence which contained hundreds of counterfeit Nokia and Blackberry cell phone housings and hundreds of counterfeit Motorola, Sony Ericsson, Blackberry and Samsung cell phone batteries (shipped from the supplier who had previously shipped counterfeit goods that had been seized). The men acknowledged that the value of the counterfeit goods they imported from China was between $120,000 and $320,000, and agreed to forfeit $150,000, the proceeds of the offense.
Leora Schwarz admitted that on January 14, 2010, she received a notice from U.S. Customs, advising her that all importers of electronics and cellular phone products whose commercial value exceeded $2,500 had the duty to present formal entry documents to Customs for such entries. Leora Schwarz was aware that shipments of cellular phone products whose value exceeded $2,500 were being sent to Ohr, Inc. from China, and she took no action to have formal entry documents prepared, intended that the merchandise enter through the mail without formal inspection.
Deitz, Sidney Schwarz and Ohr, Inc, are set to be sentenced on July 24, 2015, at 8:30 a.m. before U.S. District Judge Gonzalo Curiel. Leora Schwarz was sentenced to one year of probation and a $1,000 fine.
|DEFENDANTS||Case Number: 14-CR-1075-GPC|
|Ohr, Inc.||Incorporated: 2007||Chula Vista, California|
|Michael Deitz||Age: 39||Chula Vista, California|
|Sidney Schwarz||Age: 60||Chula Vista, California|
|Leora Schwarz||Age: 32||Chula Vista, California|
Defendants Ohr, Inc., Michael Deitz and Sidney Schwarz
Count 18: Importation Contrary to Law, in violation of Title 18, United States Code, Sections 545 and 2
Criminal Forfeiture, in violation of Title 18, United States Code, Section 981(A)(1)(C) and 982(a)(1)(A) and (B); Title 31, United States Code, Section 5317(c)(1) and Title 28, United States Code, Section 2461(d)
Defendant Leora Schwarz
Failure to Present Entry Documents, a misdemeanor, in violation of Title 19, United States Code, Sections 1433 and 1436(c) and Title 18, United States Code, Section 2
Homeland Security Investigations