A team of U.S. Customs agents based in Kentucky swept into Los Angeles this week and arrested seven importers, including five Korean nationals, and seized thousands of allegedly counterfeit high-fashion handbags, watches and articles of clothing.
According to arrest warrants made public Wednesday in U.S. District Court in Los Angeles, the seven arrested sold counterfeit merchandise bearing such names as Louis Vuitton, Gucci and Rolex to Customs agents in Kentucky, shipping the merchandise by United Parcel Service.
Customs officials estimated that the merchandise, taken in the largest such seizure ever in the Los Angeles area, could have been sold for more than $1 million.
A spokeswoman for the Customs Service said Wednesday that several truckloads of merchandise were seized by agents who served 10 search warrants Tuesday, primarily in the garment district of Los Angeles. Most of the merchandise appeared to have been imported from Korea, spokeswoman Maryanne Noonan said.
Customs agents were cataloguing the merchandise at the Terminal Island federal prison Wednesday and are planning to hold a press conference on the seizure today.
Six men and one woman arrested as part of the operation were charged Tuesday with conspiracy, smuggling and counterfeiting. All were arraigned Tuesday in U.S. District Court in Los Angeles and released on $15,000 bail.
Noonan said the U.S. attorney's office is expected to prosecute the seven in Kentucky, where the six-month investigation was centered.
Arrested were Heung Sik Nam, 35, of Los Angeles; Pong Chip Chon, 36, of Los Angeles; Won Kun Oh, 41, of Los Angeles; Kyu Sang Kim, 39, of Bellflower; Hak Bong Son, 39, of Los Angeles, and Chang Kwun Shin, 29, and his wife, Kwan Hee Shin, 31, both of Walnut.
Nam, Chon, Oh, Kim and Son are all Korean nationals, court records showed.
The Shins, charged with conspiracy, smuggling and trafficking in counterfeit merchandise, could be sentenced to a maximum of 15 years in prison and fined $270,000 if convicted. Nam, Chon, Oh, Kim and Son were charged with smuggling and trafficking and could be sentenced to 10 years in prison and fined $260,000.
Noonan said the investigation, called Operation Tradesman, began in Cincinnati after counterfeit merchandise began showing up in Midwest markets.
According to affidavits filed with the arrest warrants, customs agents found the name Chang Kwun Shin and a telephone number for Slauson Total Fashion with several hundred pieces of counterfeit merchandise seized Jan. 10 at a retail outlet in Louisville.
An agent called the number early in February and ordered merchandise. Later, 38 Gucci and Louis Vuitton bags arrived in Kentucky, C.O.D.
When the agent phoned again in May, Kwan Hee Shin bragged over the phone that "she was the largest distributor of counterfeit goods in Los Angeles and that she supplied all of the smaller retailers in the area and many out of state," the warrant said. She told the agent she had a warehouse full of Louis Vuitton merchandise and offered discounts for orders of more than 100.
Meanwhile, agents came to Los Angeles in March for meetings with the five others, believed to be part of a second smuggling operation that operated on a similar basis. In those meetings and with follow-up telephone orders in April, they made purchases that included 78 MCM handbags for $1,154 and 30 Rolex watches for $750. In all, more than 300 items were shipped to several Kentucky cities.