U.S. Customs agents Friday announced the largest seizure of counterfeit watches in the agency's history, part of a continuing operation that so far has resulted in three indictments.
At the Long Beach federal building, customs officials displayed stacks of boxes filled with about 40,000 counterfeit watches and unassembled watch parts seized since late December.
Federal agents said the imported fake watches are worth $36 million. Most came from Hong Kong as parts and were assembled in the United States.
The investigation began in December when customs agents seized one package of counterfeit watch parts from Hong Kong that had been sent to a fictitious name in Los Angeles. The investigation resulted in the seizure of about 12,000 watches Jan. 31 at a storage facility on Mission Road in Los Angeles. About 28,000 counterfeit watches were seized from a showroom at the California Mart in downtown Los Angeles on May 11.
More counterfeit watches are smuggled through Los Angeles than any other port of entry in the country, said U.S. Customs spokesman Michael Fleming. Fake watches are the fourth most common type of counterfeit merchandise seized, agents said.
Slightly more than $1 million in counterfeit watches were seized in the Los Angeles area in 2000, compared to the $36 million seized in the case described Friday.
"This particular case reflects the sophistication and brazenness" of the counterfeiters, Fleming said. With some of the watches, "even some of the experts couldn't tell" they were counterfeit, he said.
A federal grand jury indicted Guatemalan citizen and Los Angeles resident Edwin Echeverria, 26, on March 9 on five counts of trademark law violations. Authorities say Echeverria tried to import 35 more packages of watch parts seized by customs last year in Los Angeles and Oakland.
Chan's wife, Philippine citizen Maria Uy, 36, and Arman Chan, 36, of Walnut were indicted on one count each of similar violations May 24. All three suspects are free on bond and are scheduled to go to trial July 31. If convicted, each could face up to 10 years in federal prison on each count.
Fleming said the suspects are "absolutely" connected, adding that the three seizures are being investigated as a single case. Agents said they believe the parts are being assembled in the United States, and did not rule out the possibility of more arrests. The watches and parts were packaged in legitimate-looking boxes, and were in many cases accompanied by fake certificates of authenticity.
Among the trademarks counterfeited were Cartier, Bulgari, Armani/Fossil, Technomarine, Tag Heuer, Omega, Movado and Rolex. The watches were appraised jointly by customs specialists and experts from the watch companies. U.S. Customs Agent Craig Ziegler, who is in charge of the case and has worked on counterfeit importation crimes for more than 20 years, said the fakes were being sold through the Internet and at retail outlets. Fake Rolex watches, some of the priciest being counterfeited, could sell for as high as $44,000, Ziegler said.
"Some people will probably never find out," he said. "In their own right, they may be very good watches. These are good enough for retail." Some of the fakes are so well crafted that they could even end up at licensed dealers, Fleming said. Others are "swap meet" quality, he said, a variety that indicates the broad range of the operation, which is still considered active.
Legitimate watch manufacturers are becoming frustrated at the growing counterfeit watch industry, because of financial damage and damage to their products' reputation.
Adam Rieter, a representative of Giorgio Armani, which makes some of the watches counterfeited, demonstrated slight inconsistencies that signal a counterfeit. Small imprints and irregular logos are telling, he said.
"It takes a pro [to do this]," Rieter said. "These guys are really brazen."