Wholesaler Supplied Counterfeit Goods to Small Retail Stores
A Mill Creek, Washington man was sentenced today in U.S. District Court in Tacoma to six months in prison for importing drug paraphernalia and receipt of misbranded drugs, announced U.S. Attorney Annette L. Hayes. JAE SEON YOON, (AKA: Jason YOON), 56, was the president or vice-president of multiple companies doing business in Washington State over the years including J&J, Inc. (d/b/a “Top Wholesale, Inc."), Smomax, Inc. (d/b/a “346 Glass Pipe/Master Trading") and Three People Corp. (d/b/a/ “Cigar USA"). YOON pleaded guilty in March 2016. Following YOON’s arrest in July 2015, his assets were seized and his most recent business venture in Lynnwood, Top Wholesale, was shuttered. YOON imported and distributed drug paraphernalia and other goods with counterfeit markings that made them appear to be from established suppliers. YOON also sold ‘sex pills’ claiming to enhance sexual prowess. Such pills contained a variety of ingredients in combinations and at dosage amounts that were never approved by the FDA and were never listed on the labels. At sentencing U.S. District Judge Ronald B. Leighton said “You were persistent in your decisions to circumvent customs and counterfeit laws. This is an affront to the rule of law."
YOON imported drug paraphernalia from China, sometimes via Canada, by marking them as vases, laboratory glassware, or oil and vinegar dispensers. Multiple shipments were seized by law enforcement; one shipment was addressed to a wholly fictitious company in an attempt to evade discovery by law enforcement. While the items were made in China, they were falsely marked with the logos of companies who manufacture similar goods in Germany and Canada. YOON also imported e-cigarettes and chargers which bore counterfeit Underwriters Lab (U/L) markings. U/L is an American worldwide safety consulting and certification company that provides safety standards for electrical devices and components. YOON then sold the counterfeit items at Top Wholesale to small “mom and pop" type retail stores.
YOON also imported counterfeit logo stickers to apply to items to increase their resale value, including Seattle Seahawks and other NFL team stickers. YOON also trafficked in “Hello Kitty" logo items despite being served with a cease and desist letter by the registered trademark owner.
In addition to the counterfeit goods and ‘sex pills,’ YOON trafficked in ‘spice’- a synthetic form of marijuana. ‘Spice’ that was seized in the course of the investigation tested positive for controlled substances. When YOON learned that the FDA was coming to discuss his operation, he had his staff move all the ‘sex pills’ and ‘spice’ to an off-site location. He then moved the contraband back to the business for its continued sale when he thought the danger from the FDA visit had passed.
In June 2015, law enforcement executed search warrants at YOON’s operations. Agents seized 200,000 items of drug paraphernalia, more than 50,000 counterfeit items of all sorts, more than 10,500 ‘sex pills,’ and hundreds of packages of spice. All told, it took more than four extended-length semi-truck trailers to remove all of the contraband and counterfeit merchandise from Top Wholesale. Agents also seized nearly $800,000 in criminal proceeds; YOON had hidden $647,900 of that amount, in cash, in a safety deposit box rented in someone else’s name. Revenue agents from the State of Washington assessed a fine in excess of $30 million for YOON’s sales of untaxed tobacco and other tobacco products since 2011.
YOON will likely be deported to his native Korea when he finishes his prison term.
The case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from U.S. Customs and Border Protection (CBP), the Washington State Liquor and Cannabis Control Board, and the Food and Drug Administration (FDA) Office of Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Marci L. Ellsworth.
Source: U.S. Department of Justice, Office of the United States Attorneys
