Kings County District Attorney Charles J. Hynes today announced the arrest of Jianfeng Guo, 29, who ran a major smuggling and counterfeiting business, and Saile Gao, 27 – an employee of his. The arrest was accompanied by the seizure of truckloads of bogus products, which, if genuine would be worth approximately $4 million.

“This type of counterfeiting and black-market dealing affects everybody’s bottom line,” said DA Hynes. “Merchants operating in this underground economy are able to sell their goods at lower prices than legitimate shopkeepers and deprive the city of millions of dollars in lost tax revenue.”

The investigation was spurred by complaints from Mothers Against Gangs, formed in conjunction with Deanna Rodriguez, Chief of the District Attorney’s Gang Bureau, about baseball caps designed by appeal to street gangs being sold in local stores. With the assistance of Major League Baseball, Detective Investigators from the District Attorney’s Office began making purchases from those stores, looking for counterfeits.

Both defendants are charged with Trademark Counterfeiting in the First Degree, Trademark Counterfeiting in the Second Degree, and Trademark Counterfeiting in the Third Degree. They face up to 15 years in prison, if convicted.

Guo is charged with running his operation, Eastern Trading Company, out of a warehouse, at 50-03 Metropolitan Ave. in Queens, where he filled all three floors and a basement with counterfeit goods. Items included baseball caps, high-end clothing, duffel bags, batteries, soap, razors, sunglasses, toys and cell phone cases. The brand names counterfeited include Major League Baseball, the Yankees, the NFL, Duracell, Gillette, Dove Soap, Chanel, Crazy Glue, Nikelodeon, Nike, Northface, and Dolce & Gabana. When the warehouse was emptied by Detective Investigators from the Brooklyn District Attorney’s Office, the inventory filled one 40-foot tractor trailer and a 20-foot box truck.

The items were destined for sale across the city, by sidewalk vendors and dollar stores. Guo’s inventory was manufactured in China and shipped by boat through the Panama Canal and up to New York.

Receipts seized during Guo’s arrest indicate that his illicit trade grossed roughly $16 million, so far, in 2008. The legitimate retail value of the items seized is estimated at $4 million, but sold on the street, they would likely fetch $600,000, resulting in a $340,000 sales-tax loss to the city. Guo’s records show that since 2005, his gross profit was $61 million, resulting in $7.6 million in lost corporate and personal income tax revenues to the city and state.

DA Hynes warns that counterfeit goods can be dangerous to consumers. Knockoff batteries often contain mercury, and counterfeit clothing is unlikely to conform to American fire-safety regulations. Painted items may contain lead. Samples of items recovered are now being tested for heavy metals and other dangerous compounds.

The investigative team was led by Detective Investigator Thomas Farley and included Detective Investigators Radmila Aliyev and Anabell Talavera. The investigation was supervised by George Terra, Assistant Chief of the Special Investigations Division, and Supervising Detective Investigator Gregory Deboer. Joe Ponzi is Chief of Investigators.

Prosecutors who worked on the case include Assistant District Attorneys Karen Turner, Joseph DiBenedetto, Michael Ryan, and Stephanie Cone, all of the Rackets Bureau; and Gregory Mitchell, Robert Renzulli and Steven Kramer, from the Money Laundering and Revenue Crimes Bureau. Michael Vecchione is Chief of the Rackets Division.

(YWN Desk – NYC)