Breaking News in the Industry: April 20, 2017

$300,000 credit card scheme brings prison

A man involved in a $300,000 fraud scheme was recently sentenced to 45 months in prison. Daniel Hernandez Perez was convicted for his part in a major fraud scheme using Walmart and Sam’s Club gift cards. Perez, Lixandra Gelaber Matos, and others re-encoded the gift cards with stolen account numbers to fraudulently purchase items. Both men were also ordered to pay back $218,000. Police were alerted to the fraud scheme last July, after being called to investigate a disturbance at a hotel. A search of the room turned up a device used to encode stolen credit card information onto blank or exhausted cards. The men were arrested along with two others in the room, Alexander Santiesteban-Criado and Yume Martinez-Orta, all of whom are Cuban citizens and lawful U.S. permanent residents. According to the FBI, the group used 87 account numbers to make over $40,000 worth of purchases in just four days back in June. Perez and Criado are believed to have acted as shoppers at the direction of others. A search of Criado’s phone turned up images of him wearing expensive jewelry, posing with guns, and holding bricks of cash. He is currently awaiting sentencing, with his date set for April 24. [For more: Michigan Live]

Woman pleads guilty to embezzling more than $400,000

Natalee Crumley, a 24-year-old bookkeeper at the JCCS accounting firm, pleaded guilty on Tuesday to embezzling $420,000 from Great Falls, Montana area businesses. She had been charged with wire fraud, aggravated identity theft, “engaging in monetary transactions in property derived from specified unlawful activity”, and criminal forfeiture. She is faced with a maximum sentence of 30 years in federal prison and up to a $750,000 fine. Crumley admitted to forging roughly 112 checks from 2015 to 2016, using local business owners signatures to pay herself. Using a program known as Quickbooks, she altered checks to make them appear like standard checks meant for vendors. Initially, she claims to have stolen the money to help her boyfriend’s family. A company auditor failed to catch her and she continued the scheme. Over time she withdrew over $140,000 in cash to fund her new lifestyle, including trips to Miami and Long Beach, shopping sprees, and even NCAA Final Four basketball tickets. When asked what was left of the money, she indicated that it had all been spent. [For more: Great Falls Tribune]

Walmart cashier accused of stealing over $7,000

A 19-year-old cashier at a Cedar Park Walmart was arrested and charged with felony theft. Lena Brown was caught after the loss prevention team watched her on surveillance video ringing up a false transaction and pocketing $57. She was recorded taking amounts of up to $350 at a time, on eleven transactions. But Brown stole thousands more through gift cards and loading credit cards in her name. She faces a maximum of two years in jail. [For more: Statesman]

Gucci grabs $9m verdict in counterfeiting claim

On Monday, a US District Court judge ruled in favor of Gucci America, as the luxury brand secured a $9,000,000 verdict along with a permanent injunction against online counterfeiters. Gucci made the claim in December, accusing 89 defendants of charges ranging from counterfeiting and trademark infringement, false designation of origin, cybersquatting, and unfair competition. Gucci was also awarded control over defendant domain names that were nearly identical or confusingly similar. [For more: World Intellectual Property Review]

Former state employee charged with embezzling $70,000

An 80-year-old Michigan woman was recently charged with embezzlement after investigators found evidence that the former Executive Director of the Michigan Hispanic/Latino Commission had stolen more than $70,000. Maria Louisa Mason had been working in the Department of Civil Rights and been suspected of stealing funds beginning in February 2013. She is also believed to have taken money that was intended for a Cesar Chavez memorial statue, that has yet to be built. Investigators say she embezzled $73,500 before retiring in late 2015. Mason used the money to pay numerous credit cards, taxes, among other personal uses. Her bond was set at $10,000. [For more:]

High Point police bust massive fencing operation, recover stolen property

A 38-year-old man from High Point, North Carolina was arrested as part of a large fencing operation bust and police seized multiple truckloads of stolen property. Charles Robert Hazelwood was charged with receiving stolen property, obtaining property by false pretense, and organized retail theft. An investigation into a string of robberies around High Point led police to Hazelwood. Many of the items confiscated were power tools. Officers believe it will take several weeks to determine the value of the stolen property. Hazelwood was booked and his bail set at $100,000. More arrests are expected to follow. [For more: Fox 8]

Why the US can’t afford to fall behind in intellectual property enforcement

The United States Chamber of Commerce 2017 International IP Index shows that the U.S. has fallen to fifth when it comes to intellectual property (IP) enforcement, ranking behind the United Kingdom, Sweden, France, and Germany. The Chamber’s Index cites the U.S.’ failure to consistently enforce against counterfeit and pirated goods as the main reason for falling. It is important to understand the global counterfeiting problem to effectively protect American IP.

The counterfeit goods trade has continued to see explosive growth. According to the Organization for Economic Cooperation and Development (OECD), the counterfeit trade is up to $461 billion annually. An estimated 86% of that comes from China and Hong Kong. As brick and mortar retailers close down on record pace, massive amounts of fake goods are no longer being smuggled into U.S. ports. The online marketplace boom has allowed criminals to sell directly to the consumer, making detection more difficult. It is also more difficult than ever to distinguish legitimate websites from fake ones. Finally, customs agents are struggling worldwide to stop counterfeiting, as just 2.5% of fake items are estimated to be seized.

Industry experts must continue to work with enforcement agencies in order to combat this growing problem. The recent Trade Facilitation and Trade Enforcement Act is one such example of their coordinated effort. Future progress will require a global effort and a public-private partnership. [For more: Forbes]


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