Breaking News in the Industry: March 16, 2017

Florida man found guilty as part of $2.4M counterfeit DVD ring

A Fort Myers, Florida, man will learn in June how much time he will spend in federal prison after being found guilty of conspiracy to traffic in counterfeit trademarks on DVDs and trafficking in DVDs bearing counterfeit trademarks. According to testimony and evidence presented at trial, Jason Sanon, 30, owned and operated WipeoutDVDs.com, an online company that sold counterfeit DVDs to retail customers across the United States from the end of 2010 to mid-2013. He bought the DVDs that he sold from TM Wholesale, a Chinese manufacturer of counterfeit DVDs.
The testimony established that Sanon had bought at least $600,000 in movies and TV box sets from his source in China, and then resold them for a profit to his customers. All of the DVDs that Sanon sold through his company bore counterfeit trademarks and logos of the movie studios that had produced the authentic versions of these disks. Sanon will learn his fate June 1.

The investigation leading to this prosecution was the off-shoot of a related investigation conducted by the Department of Homeland Security,  which resulted in the successful prosecution of 15 other individuals who had also trafficked in counterfeit DVDs from the same Chinese source. That investigation led to criminal forfeitures of over $2.4 million and other seizures of vehicles and a business in Polk County. [For more: Naples Daily News]

Groups oppose raising shoplifting felony threshold from $300 to $2,000

Illinois is playing host to a fierce battle between retailers and lawmakers as the state will soon decide whether or not to increase the felony threshold in shoplifting cases. Currently, a person is subject to felony shoplifting charges if the amount of goods stolen is over $300. The proposed plan would increase that amount to $2000, which represents a nearly 600% increase in the amount that could be stolen without producing a felony. The proposal is in response to state (and nationwide) prison overcrowding, and among recommendations brought by the Commission of Criminal Justice and Sentencing Reform. The goal of the commission was to reduce the state prison population by as much as 25% over the next eight years.

The president and CEO of the Illinois Retail Merchants Association, Rob Karr voiced his concerns with the proposal, suggesting that the average retail thief in jail usually has several prior arrest. Furthermore, they are usually only caught about 1 in 48 times. Greg Sullivan, director of the Illinois Sheriffs’ Association, understands the importance of avoiding sentencing low-level offenders to jail, but fears that the proposed threshold increase would incentivize criminal organizations to take advantage of this, as is happening in other states. Retail items were on display at the news conference, as examples of what criminals could steal while remaining under the $2000 felony threshold. These items included 55-inch TVs, multiple iPhones, laptops, and even 58 pairs of jeans.  [For more: State Journal-Register]

LP Worldwide: Four men charged in $1M Canada Day lobster heist

The Royal Canadian Mounted Police (RCMP) have charged four men for their roles in a recent million-dollar lobster theft. Police believe the men are part of a large criminal organization that has been targeting cargo shipments. This past summer, a transport truck was stolen from Eco-Technologies Ltd. and subsequently used in the heist, in which a refrigerated unit filled with frozen lobster was stolen from LeBreton and Sons Fisheries Ltd.

On March 8th, police conducted six raids in an effort to take down an alleged multi-million-dollar criminal enterprise. The raids led to over 16 arrests and police are still seeking three more men believed to be involved. During the raid police also seized truckloads of stolen items including “diapers, pork, lobster, and sparkling fruit juice.”  [For more: CBC News]

More than 300 data breaches to date in 2017

The latest count from the Identity Theft Resource Center (ITRC) reports that there have been 312 data breaches recorded this year through March 14, 2017, and that over 1.3 million records have been exposed since the beginning of the year.  At the U.S. Department of Health and Human Services (HHS) breach portal, there is an entry for Commonwealth Health Corporation (Kentucky) indicating nearly 700,000 individuals have been affected by a theft of data, but no additional details are available for this incident.

The medical/health care sector leads all sectors in the number of records compromised so far in 2017. The sector posted 25.3% (79) of all data breaches. The number of records exposed in these breaches tops 740,000, or about 57.2% of the 2017 total. The business sector accounts for more than 470,000 exposed records in 155 incidents. That represents 49.7% of the incidents and 36.4% of the exposed records so far in 2017. The educational sector has experienced 54 data breaches since the beginning of the year. The sector accounts for 17.3% of all breaches for the year and nearly 40,000 exposed records, about 3% of the year’s total. The government/military sector has suffered 19 data breaches to date in 2017, representing about 3.4% of the total number of records exposed and 6.1% of the incidents. More than 43,000 records have been compromised in the government/military sector. The number of banking/credit/financial sector breaches now totals five, just 1.6% of the total incidents reported so far this year. No records have been reported to be compromised in the five incidents. Since beginning to track data breaches in 2005, ITRC had counted 7,139 breaches through February 28, 2017, involving nearly 889 million records.  [For more: Yahoo! Finance]

Ex-San Mateo County fire chief pleads no contest in fraud scheme

A former San Mateo County fire chief accused of stealing tens of thousands of dollars through a credit card fraud scheme that prosecutors say he ran with his wife, who fled the country years ago, pleaded no contest on Monday to multiple felonies. Mark Steven Ladas, 52, pleaded no contest to six counts of grand theft and two counts each of tax evasion and filing false tax returns, all felonies, according to San Mateo County District Attorney’s Office.

Ladas had been chief of the Central County Fire Department — which serves Hillsborough, Burlingame and Millbrae — before he was charged in December 2014 with crimes stemming from the fraud scheme. The crimes span over a two-year period beginning in January 2011, when Ladas’ wife, Peta Ladas, allegedly opened several credit cards under fake names, said Karen Guidotti, chief deputy district attorney for San Mateo County. Peta Ladas is accused of using the credit cards to make purchases from a fake business that she and her husband set up using point-of-sale machines. Three of the accounts in Mark Ladas’ name contained about $35,000, Guidotti said. The income was not listed for tax purposes for 2011 and 2012, officials said.

His wife, Peta, was arrested in December 2012, but fled the country after making bail. Prosecutors say she lives in Canada with her daughter, who was 8 or 9 years old at the time she jumped bail, said District Attorney Steve Wagstaffe. “Canada won’t extradite on a matter like this,” said Wagstaffe, citing the nonviolent nature of the crime. “They won’t honor extradition, so she has successfully fled across the border with her daughter.” He faces a sentence of up to 90 days in county jail when he is sentenced on May 5. Prosecutors had initially sought a sentence of 3 years and 8 months in state prison. He is currently out of custody on $80,000 bail.  [For more: SF Gate]

US charges Russian spies over Yahoo breach

The members of the FSB, the Russian intelligence agency, conspired with criminal hackers, according to DOJ officials announcing the charges. Previously, Yahoo said “state-sponsored” hackers were behind the 2014 breach affecting 500 million accounts. The suspects are also alleged to have targeted Google accounts. Hacking was directed at Russian and US government officials, including security, diplomatic and military personnel, according to the DOJ. The indictment also alleged that 30 million Yahoo accounts were commandeered without authorization for use in a spam campaign.

“We will not allow individuals, groups, nation states, or a combination of them to compromise the privacy of our citizens, the economic interests of our companies, or the security of our country,” said acting attorney general Mary McCord, announcing the charges. The suspects were named in a DOJ press release as:

  • Igor Anatolyevich Sushchin, 43, a Russian national and FSB officer
  • Dmitry Aleksandrovich Dokuchaev, 33, a Russian national and FSB officer
  • Alexsey Alexseyevich Belan, 29, a Russian national and resident
  • Karim Baratov, 22, a Canadian and Kazakh national and a resident of Canada
  • Baratov was arrested on 14 March in Canada.
    [For more: BBC News

Stella stops northeast retail in her tracks

While Stella was downgraded from a blizzard to a winter storm, on Tuesday she caused disruptions across the Northeast and Midwest, and the impact will be felt well into next week, experts said. More than 130 million people are affected by the storm, including those in cities such as Boston, Baltimore, Washington, D.C., Chicago and Philadelphia.

Planalytics estimated the economic impact of the storm will be $310 million for apparel, including specialty mall-based and independent retailers and department stores. This is in comparison to the same week of last year. While the storm is expected to move offshore today, the lingering cold temperatures in the Northeast will deter consumers from visiting the mall, said Evan Gold, executive vice president of global services for Planalytics Business Weather Intelligence. “Most markets through this weekend are trending 10 degrees to 20 degrees below normal. We’re comping the fifth warmest day of last year. Even if the roads clear, there will be snow on the ground, which doesn’t put people in a spring mind-set.”

Consumers got a hint of spring in February, which was the second-warmest in recent memory. “Spring got off to a great start, but now it’s come to a screeching halt,” Gold said. “The only saving grace is that Easter is falling later this year, so “there will be a little bit more runway to make up the business.” Home improvement chains such as Home Depot and Lowe’s have even more at stake. “It’s their Christmas right now,” said Gold. “People are going to Lowe’s and Home Depot for shovels and ice melt, but that’s not what they want to be selling now. We’re estimating the impact of the storm on home centers is going to be $1.2 billion.”  [For more: WWD]

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