Chinese Counterfeit Perfume Importers Indicted

By Alison Parker

Reviewed by Jennifer Williams

Las Vegas cops spotted Shaoxia Huang and Shaoxiong Zhou back in March and thought that something just didn’t smell right. The perfumes that they were selling sure looked like popular fragrance brands, and were packaged like popular fragrance brands, but they weren’t popular fragrance brands at all–at least that’s what a Brooklyn grand jury thought was likely when they returned a two-count indictment against Shaoxia Huang, Shaoxiong Zhou and Shaowu Zhou for trafficking in counterfeit goods and conspiracy.  The indictment states that the three Chinese natives allegedly imported 37,000 individual units of counterfeit cosmetic fragrances. The perfumes, believed to be manufactured in China, donned trademarks that belong to well-known fragrance brands. In addition to the allegedly unauthorized use of the trademarks, the perfume bottles were packaged in a manner likely to be confusingly similar to the genuine fragrances.

An indictment is simply a formal accusation that one has committed a crime; as of now, the group is presumed innocent until proven guilty beyond a reasonable doubt. If they are convicted, each one of them faces up to 5 years in prison on the conspiracy charge and up to 10 years in prison on the counterfeit products charge with fines of up to $2,250,000. Additionally, the indictment seeks forfeiture of profits from illicit trafficking in counterfeit goods as well as seizure of goods.

According to the Department of Justice’s web site, this indictment is part of a larger effort on behalf of the Department of Justice’s Intellectual Property Task Force. Launched in February 2010, the IP Task Force is part of the Justice Department’s initiative to vigorously police domestic and international IP crimes. Generally speaking, the IP Task Force seeks to crack down on the links between IP crime and organized crime and to safeguard the nation’s economic security against those who profit illegally from American intellectual property.

Essentially, the IP Task Force’s mission is to crack down on counterfeit criminals, but its efforts won’t truly succeed until the American purchasing public does the same. Purchasing a counterfeit item is not currently a crime in the US; this fact, combined with most Americans general unawareness of the dangers associated with IP theft, is a huge obstacle for the IP Task Force. According to the Commerce Department, IP theft costs U.S. businesses an estimated $250 billion annually, as well as 750,000 American jobs. Figures from the World Customs Organization and Interpol put the total global trade in illegitimate goods at more than $600 billion a year. Many counterfeiters have been prosecuted to date, but the truth is, they wouldn’t have been here in the first place if America wasn’t a viable market for their goods. There is a general perception that IP theft is a victimless crime but clearly these stats prove otherwise. As consumers in America, we are both part of the problem and the solution.

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