January 22, 2016: Counterfeit Cigarette Smuggler Receives Jail Sentence
Gaurav Joseph Jayaseelan, 25, a citizen of India, was sentenced by U.S. District Court Judge William P. Dimitrouleas to 16 months in prison, to be followed by one year of supervised release, for trafficking in counterfeit cigarettes.
Wilfredo A. Ferrer, United States Attorney for the Southern District of Florida, Robert J. West, Acting Special Agent in Charge, Miami Field Office, and U.S. Food & Drug Administration, Office of Criminal Investigations (FDA/OCI), made the announcement.
Jayaseelan previously pled guilty to selling and dispensing and causing the sale and dispensing of a counterfeit tobacco product, cigarettes, the labeling of which bore the trade name of Newport cigarettes, a tobacco product listed with the FDA under 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; and trafficking in 53,740 cartons of cigarettes, while knowingly using a counterfeit mark on and in connection with such cigarettes, the use of which was likely to cause confusion, cause mistake, and deceive. The counterfeit marks were false marks identical to and substantially indistinguishable from the marks of the legitimate manufacturer of Newport brand cigarettes, which were in use by and registered to the manufacturer on the principal register of the U.S. Patent and Trademark Office, in violation of Title 18, United States Code, Sections 2320(a) and 2.
According to the court record, including a jointly filed factual statement and statements made at the sentencing hearing, the investigation began in January 28, 2013, when a U.S. Food & Drug Administration/Office of Criminal Investigations (FDA/OCI) undercover agent met and discussed the sale of counterfeit Marlboro brand cigarettes with a middle-man. Thereafter, negotiating by email, a deal to sell and ship counterfeit Marlboro Reds, for a total cost of $377,300.00 was reached. To pursue the deal, agents made an initial wire transfer of funds to an account in Dubai, United Arab Emirates for the purchase of the counterfeit cigarettes.
In August 2013, undercover agents met with defendant Jayaseelan, who travelled to Miami, FL to discuss the pending sale. During the recorded meeting, Jayaseelan told the agents that he and his father, Jayaseelan were in the cigarette and alcohol business and claimed they owned their own tobacco manufacturing plant which could manufacture any tobacco brand. Jayaseelan later sent an email offering to provide counterfeit Newport cigarettes within four to five weeks. Subsequently, at Jayaseelan’s request, two cartons of Newport cigarettes to be used as samples for the manufacturing of the counterfeits were provided to an address in India.
In January 2014, Jayaseelan emailed that they would send 1,030 master cases of Newport cigarettes for a total wholesale price of $450,625. In May 2014 the shipment was seized by Customs and Border Protection Officers at Port Everglades, in coordination with the FDA/OCI and agents of the Department of Homeland Security (HSI). The counterfeit cigarettes had an estimated street value in the United States exceeding $5.6 million. Although the product was seized, the agents were able to conceal from the suppliers that they were law enforcement officers, and Jayaseelan travelled to the United States in August 2015, only to be arrested for his role in the criminal conduct.
Counterfeit cigarettes, which are sold without proper registration and testing may pose a greater health risk than consumers recognize, due to the presence of contaminants either not found in products originating from the lawful manufacturers, or which are present in greater concentrations.
Mr. Ferrer commended the investigative efforts of the FDA/OCI, Miami Field Office, U.S. Customs and Border Protection (CBP), Port Everglades Office, ICE-HSI, Fort Lauderdale Office, and Broward Sheriff’s Office (BSO) for their assistance in the development of the case. This matter is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.