Counterfeit items seized at flea market worth $47.3M

Homeland Security agents continued their work inside the Patapsco Flea Market today, after their raid on Sunday which shut down the market.
Homeland Security agents continued their work inside the Patapsco Flea Market today, after their raid on Sunday which shut down the market. (Amy Davis/Baltimore Sun)

Last month's raid on the Patapsco Flea Market in Southwest Baltimore netted $47.3 million worth of counterfeit luxury goods, the largest seizure at a flea market in the United States, federal authorities announced Thursday.

U.S. Immigration and Customs Enforcement's Homeland Security Investigations also confiscated $1.5 million in cash, which it described as "suspected criminal proceeds."

Federal officials released new details of the April 22 raid on the bazaar, where authorities say vendors sold counterfeit and pirated goods with the market owner's knowledge. The raid came after a 21/2 -year sting targeting merchants selling fake and pirated goods at the popular market, which has a history of similar seizures, according to federal documents.

Over four days, agents confiscated nearly 220,000 counterfeit items that were found at the market. They included luxury labels such as MAC Cosmetics, Louis Vuitton, Gucci, Chanel and Tiffany & Co. Also included were Sony, Apple and Baltimore apparel maker Under Armour.

Besides clothes, agents confiscated shoes, perfume, personal care items, and pirated DVDs and CDs.

While federal authorities released the value of the items seized — based on the manufacturer's suggested retail price for the genuine articles — no charges were announced.

On April 25, in a separate case, a federal grand jury in Baltimore indicted five men for violating trademark laws by selling counterfeit merchandise around the region, including at the flea market.

Nicole A. Navas, a spokeswoman for Immigration and Customs Enforcement, said the flea market investigation was continuing.

Rod J. Rosenstein, Maryland's U.S. attorney, acknowledged the case but said little about it in an April 26 op/ed column in The Baltimore Sun for World Intellectual Property Day.

"Sellers of counterfeit and pirated goods cheat the people who invested time and money to create the authentic versions," Rosenstein wrote. "A simple word describes what it means when you take something that someone else owns and sell it without permission. Intellectual property fraud is theft."

Rosenstein, who serves as vice chairman of the U.S. Attorney General's Subcommittee on Cybercrime and Intellectual Property, has prosecuted several prominent cases of counterfeit and pirated goods.

In 2010, federal authorities indicted nine people for smuggling counterfeit shoes, handbags and watches manufactured in Asia through the port of Baltimore, an investigation that led to the seizure of $250 million worth of fake goods. That case included 500,000 fake Coach handbags, 120,000 pairs of counterfeit Nike shoes and samples of counterfeit Viagra pills, Rosenstein wrote in his op/ed column.

Homeland Security Investigations said the recent raid was the agency's largest counterfeit seizure at a flea market.

"It was definitely a significant raid," said Ned T. Himmelrich, who heads the intellectual property and technology practice group at the Baltimore law firm Gordon Feinblatt. "The fact that they spent two years looking into it before they did it shows that authorities thought it was significant, and the value bears that out."

The number of items seized, Himmelrich said, is just as significant as the value, which can be subjective.

"It must have taken a long time for them to put that in the van," he said.

The flea market reopened the weekend after the raid. On Saturday, customers returned to the market, where they snapped up toiletries, laundry detergent and other items.

Martin S. Himeles Jr., an attorney for the market, told The Baltimore Sun that the flea market has had and still has a policy against the sale of counterfeit merchandise. Himeles could not be reached for comment Thursday.

Besides the raid at the flea market, federal agents also searched the residence of Joseph Brzuchalski, who is listed as the resident agent of Management Inc., which owns the flea market, as well as his business account with Carrollton Bank.

Federal authorities said the bank account held "illicit funds" from the sale of counterfeit merchandise, which was then paid to management through vendor rents and fees, according to an affidavit.

During the investigation that began in November 2009, agents with Homeland Security Investigations alleged that 70 percent of booths selling items were counterfeit. The agents purchased some of the fake items and also rented a booth to gain access to the market's management.

Agents said in the affidavit that the flea market's management was aware of the illegal practice.