August 30, 2017: Two Charged in Federal Court with Smuggling Counterfeit Cigarettes
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida; Justin D. Green, Special Agent in Charge, U.S. Food & Drug Administration, Office of Criminal Investigations (FDA OCI), Miami Field Office; Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office; and Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO), announced that Abhishek Shukla and Harish Shabhai Panchal, both citizens of India, appeared in Federal District Court in Miami today to be formally arraigned on an indictment charging them and two companies, Jubilee Tobacco Industries Corp., and Pelican Tobacco (India) Private Limited, both incorporated under the laws of India, with conspiring to smuggle counterfeit cigarettes into the United States.
According to the indictment, the defendants are charged with conspiring with the intent to defraud and mislead, and selling and dispensing and causing the sale and dispensing of a counterfeit tobacco product, to wit cigarettes, the containers and labeling of which bore the trade name of Newport cigarettes, a tobacco product listed with the FDA pursuant to Title 21, United States Code, Section 387(e)(i)(1), in violation of Title 21, United States Code, Sections 331(qq)(3) and 333(a)(2), and Title 18, United States Code, Section 2 (Counts 2 and 4); and that they intentionally trafficked in goods, that is approximately 68,600 cartons of cigarettes, while knowingly using a counterfeit mark on and in connection with such cigarettes, the use of which counterfeit marks was likely to cause confusion, to cause mistake, and to deceive. The counterfeit marks were spurious marks identical to and substantially indistinguishable from the marks of the United States domestic manufacturer of Newport brand cigarettes, which marks were then in use by and registered to that manufacturer on the principal register of the United States Patent and Trademark Office, in violation of Title 18, United States Code, Sections 2320(a) and 2 (Counts 3 and 5).
Shukla and Panchal each face the following potential prison sentences: up to five years on Count 1, up to three years on Counts 2 and 4, and ten years on each of Counts 3 and 5. Additionally, they face possible fines of up to $250,000 on each count, followed by supervised release of up to five years. Jubilee faces a fine of up to $500,000 on Count 1 and Pelican faces a possible fine of $500.000 per Count. This case is assigned to U.S. District Judge Kathleen M. Williams.
According to court records, including allegations contained in the indictment, beginning as early as March 2015 and continuing through August 16, 2017, the defendants initiated contact with an individual cooperating with FDA-OCI, offering counterfeit cigarettes for sale. Through internet negotiations, agreement was reached for a 20-foot container to be shipped from India to Miami, Florida, laden with counterfeit Newport brand cigarettes. Payment for the shipment was made in installments through international wire transfers to bank accounts in India and in Dubai, United Arab Emirates. On November 1, 2016, the container arrived in the USA and was seized with the assistance of United States Customs and Border Protection Officers at the Port of Miami. If distributed in the State of Florida, the un-taxed importation would have an approximate value of $1.2 million. Analysis conducted by FDA’s Forensic Chemistry Center concluded that the cartons, packs, and cigarettes were all counterfeit.
Within two weeks of the arrival, the coconspirators sought out the undercover agents offering another shipment, twice as large. By April 2017, deposits totaling $55,000 had been made to accounts in the name of Pelican for counterfeit Newport cigarettes. On June 9, 2017, the container arrived at the Port of Miami and was seized with the assistance of United States Customs and Border Protection Officers, and turned over to FDA Special Agents. If distributed in the State of Florida, the un-taxed importation would have an approximate value of $3.2 million.
According to acts described in the conspiracy charge, Shukla and Panchal travelled to Miami in August 2017 to meet with the undercover agents in order to promote further business dealings. During the recorded meeting, they advised the agents that they had been partners for twelve years and personally oversaw the production of all the product being offered. They also assured the agents that they could counterfeit any American-made menthol cigarette with no problem, as well as other trademarked brands and that they could produce tobacco blends which would closely match the legitimate product.
An indictment merely contains accusations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mr. Greenberg commended the investigative efforts of FDA OCI, ICE-HSI and BSO, for their assistance with this long-term investigation. Mr. Greenberg also thanked U.S. Customs and Border Protection for their support. This matter is being prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald of the Economic & Environmental Crimes Section.