ICE-led IPR Center seizes 70 websites duping consumers into buying counterfeit merchandise

WASHINGTON — U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI)-led National Intellectual Property Rights Coordination Center (IPR Center) seized 70 websites that were illegally selling counterfeit merchandise.

The 70 websites seized are part of Project Copy Cat, an iteration of Operation In Our Sites (IOS), and closely mimicked legitimate websites selling authentic merchandise and duped consumers into unknowingly buying counterfeit goods. Many of the websites so closely resembled the legitimate websites that it would be difficult for even the most discerning consumer to tell the difference.

The websites are now shut down and their domain names are in the custody of the federal government. Visitors to these websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of willful copyright infringement.

"This operation targeted criminals making a buck by trying to trick consumers into believing they were buying name brand products from legitimate websites when in fact they were buying counterfeits from illegal but sophisticated imposter sites located overseas," said ICE Director John Morton. "The imposter sites were simply a fraud from start to finish and served no purpose other than to defraud and dupe unwary shoppers."

A new twist in the websites seized in Project Copy Cat involved the appearance of Secure Sockets Layer (SSL) certificates. SSL certificates provide authentication for financial information, meaning consumers should be able to trust that they are sending information to the intended server and not to a criminal's server. Trusted SSL providers should only issue SSL certificates to verified companies that have gone through several identity checks. In addition to providing authentication, SSL certificates also provide encryption, enhancing the security of credit card numbers, usernames, passwords and other sensitive information. These websites, however, displayed SSL certificates, further duping the consumer into thinking they were shopping on a legitimate website, potentially putting customers' financial information at risk.

During this operation, federal law enforcement officers made undercover purchases of a host of products, including baby carriers, professional sports jerseys, language and fitness DVD sets, and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products. In most cases, the goods were shipped directly into the United States from suppliers in other countries. If the copyright holders confirmed that the purchased products were counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods were obtained from federal magistrate judges.

"Every day the U.S. economy and American jobs are negatively impacted by criminal organizations engaged in the sale of counterfeit merchandise through rogue websites. Even more importantly, consumer's health and safety can be threatened when they unknowingly purchase counterfeit products," said IPR Center Director Lev Kubiak. "Our goal at the IPR Center is to protect the public's safety and economic welfare through robust intellectual property enforcement and we hope that today's enforcement actions raise the public's awareness to this pervasive crime."

This operation was the next phase of IOS, a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. These 70 domain name seizures bring the total number of IOS domain names seized in the last two years to 839. This enforcement action coincides with the two-year anniversary of the 2010 launch of IOS. Since then, the seizure banner has received more than 103 million individual views.

Of the 769 previous domain names seized, 229 have now been forfeited to the U.S. government. The federal forfeiture process affords individuals who have an interest in seized domain names a period of time after a "Notice of Seizure" to file a petition with a federal court and additional time after a "Notice of Forfeiture" to contest the forfeiture. If no petitions or claims are filed, the domain names become the property of the U.S. government. Additionally, a public service announcement, launched in April 2011, is linked from the seizure banner on each of the 229 forfeited websites. This video educates the public about the economic impact of counterfeiting.

The operation was spearheaded by the IPR Center in coordination with HSI field offices in Denver, El Paso, Houston, Newark and Salt Lake City. U.S. Attorney's Offices in the Western District of Texas, Southern District of Texas, District of New Jersey, District of Colorado and the District of Utah issued the warrants for the seizures. The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. The IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

During the first phase of IOS in 2010, the IPR Center received information from the Motion Picture Association of America that a website, www.ninjavideo.net (Ninja Video), was illegally distributing pirated copies of motion pictures and other audiovisual works. Ninja Video provided its millions of visitors the ability to illegally download high quality copies of copyrighted movies including movies that were currently in theaters or not yet released.

Following the seizure of the website, search warrants were executed at the residences of the primary suspects in the United States and funds were seized from 15 separate financial accounts. To date, the Ninja Video investigation has resulted in the arrest and conviction of five of the six co-conspirators with sentences ranging from 22 months in federal prison to three years of probation with a combined restitution exceeding $470,000 to the victims. A sixth co-conspirator remains a fugitive. In addition to Ninja Video, IOS phase one also targeted eight other websites selling counterfeit merchandise in New York.

Previous website seizures include:

•           First phase: 9 domain names

•           Second phase: 83 domain names

•           Third phase: 10 domain names

•           Fourth phase: 18 domain names

•           Fifth phase: 5 domain names

•           Sixth phase: 17 domain names

•           Seventh phase: 58 domain names

•           Eight phase: 156 domain names

•           Ninth phase: 10 domain names

•           Tenth phase: 385 domain names

•           Salt Lake City: 7 domain names

•           Sustained Effort: 11 domain names

These cases are part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation's economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.

To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.