Last month in an article published in the Portland News titled, “Man Who Trafficked Counterfeit Nike Shoes Sentenced in Multimillion-Dollar Fraud,” written by Maxine Bernstein, she reported that the Oregon U.S. Attorney announced the sentencing of an online (unauthorized) Nike sneakers entrepreneur for counterfeiting and money laundering.
There were a number of intriguing things about this case, such as:
- The defendant used homeless persons as “runners” to line up outside Nike stores when new sneakers were being released to get his inventory
- Befriended Nike employees who received sneakers legitimately at their office or through their employee access to the Nike store
TOOK A WRONG TURN
Up to that point (although unorthodox) you can’t help but admire the criminal’s resourcefulness until he found himself unable to collect enough authentic Nikes’ to fill the online orders and resorted to Chinese manufacturers of counterfeit Nike sneakers to supplement his dwindling inventory.
Fortunately (for Nike and future potential consumers of his counterfeits) that house-of-cards came tumbling down when a number of his online customers complained to Nike about the inferior quality of the sneakers they’d purchased.
DEFENDANT’S TAKE AND PUNISHMENT
According to the government’s sentencing memorandum the defendant received payments in excess of $2.6 million in a three-year period (2012-2015.)
The defendant was sentenced to four months in prison as well as three years of supervised release.
BASIS FOR THE MONEY LAUNDERING CHARGE
In an effort to better understand the basis of the money laundering charge, I did some research into the case court docket and the explanation became obvious:
“…that defendant combined proceeds of sales of authentic Nike footwear with more than $150,000. in proceeds from sales of counterfeit Nike footwear in various financial accounts, including PayPal…”
My colleagues and I found the application of the money laundering statute to be an effective “out-of-box” tool to use in holding counterfeiters accountable, just like any other criminal that attempts to disguise the source of their loot.
And on a separate, but related point, it again raises the need to follow-the-money whenever possible.
Portland News, April 4, 2018, written by Maxine Bernstein, “Man Who Trafficked Counterfeit Nike Shoes Sentenced in Multimillion-Dollar Fraud.” http://www.oregonlive.com/portland/index.ssf/2018/04/man_who_trafficked_rare_counte.html
2U.S. Department of Justice, U.S. Attorney, District of Oregon, April 4, 2018, Press Release, “Portland Man Receives Prison Sentence for Selling Counterfeit Sneakers Online” https://www.justice.gov/usao-or/pr/portland-man-receives-prison-sentence-selling-counterfeit-nike-sneakers-online