Thursday, July 10, 2008

Brooklyn DA Raids Metro Ave Warehouse


By Conor Greene

RIDGEWOOD – An investigation by the Brooklyn District Attorney’s office into whether baseball caps are being marketed to street gang members led to the discovery a warehouse filled with counterfeit goods worth millions of dollars.

Jianfeng Guo, 29, owner of Eastern Trading, Inc, is accused of running the substantial counterfeiting operation of out a warehouse at 50-03 Metropolitan Avenue, several blocks from the Brooklyn boundary. He was arrested after authorities seized two truckloads of bogus goods last week.

Authorities estimate the value of genuine merchandise at about $4 million, but the knock-off versions were worth about $600,000. Receipts seized during Guo’s arrest indicated that the illegal business brought in about $16 million so far this year alone. Since 2005, Guo is believed to have netted $61 million from the business, costing the city and state $7.6 million in lost tax revenues.

Also charged with Guo’s girlfriend, Saile Gao, 27, who is also described as his employee, according to Kings County District Attorney Richard Hynes. Both are charged with third–degree trademark counterfeiting and face up to 15 years in prison if convicted.

“This type of counterfeiting and black-market dealing affects everybody’s bottom line,” said Hynes. “Merchants operating in this underground economy are able to sell their goods at lower prices than legitimate shopkeepers and deprive the city millions of dollars in lost tax revenue.”

The investigation began after Hynes’ office received complaints from Mothers Against Gangs that companies were designing and marketing baseball hats to appeal to gang members. With assistance of Major League Baseball, detectives from the district attorney’s office began making purchases from local stores to see if any were selling counterfeit items. That investigation eventually led authorities to the warehouse used by Guo’s business.

According to authorities, Guo ran his company, Eastern Trading Company, out of the Metropolitan Avenue warehouse, which was filed with three floors worth of counterfeit baseball caps, high-end clothing, razors, sunglasses, toys, cell phone cases and other items. Among the counterfeited brands were Major League Baseball, the Yankees, the National Football League, Duracell, Gillette, Dove, Chanel, Nike and Northface. The goods removed from the warehouse filled one 40-foot trailer and a 20-foot box truck, according to Hynes.

The items were to be sold at locations around the city, including by sidewalk vendors and in discount stores. Guo’s inventory was manufactured in China and shipped by boat through the Panama Canal to New Jersey’s Port Elizabeth. They were then trucked to the Queens warehouse, said authorities.

DA Hynes stressed to the public that counterfeit goods can be dangerous, as knockoff batteries often contain mercury, counterfeit clothing is unlikely to conform to American fire safety regulations and painted items may contain lead. Samples of the seized items are now being tested for the presence of heavy metals or other dangerous compounds.

Guo pled not guilty to the charges in criminal court last week, with bail set at $500,000.