Source: https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/criminal-investigations/june-21-2017-counterfeiters-sentenced-convictions-nationwide-conspiracy-distribute-fake-5-hour
Timestamp: 2019-06-25 21:44:38
Document Index: 327578818

Matched Legal Cases: ['§2320', '§ 371', '§ 2320', '§ 371', '§ 2320', '§ 371', '§ 2320', '§ 2320']

June 21, 2017: Counterfeiters Sentenced for Convictions in Nationwide Conspiracy to Distribute Fake 5-Hour Energy Drink | FDA
June 21, 2017: Counterfeiters Sentenced for Convictions in Nationwide Conspiracy to Distribute Fake 5-Hour Energy Drink
SAN JOSE – Joseph Shayota and Adriana Shayota were sentenced to 86 months and 26 months in prison, respectively, for their roles in a conspiracy to traffic in counterfeit goods and conspiracy to commit criminal copyright infringement and to introduce misbranded food into interstate commerce.
The announcement was made by United States Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett, and Food and Drug Administration (FDA) Office of Criminal Investigations’ Los Angeles Field Office Special Agent in Charge Lisa L. Malinowski. The sentences were handed down yesterday by the Honorable Lucy H. Koh, U.S. District Court Judge, bringing an end to all but one of the cases brought against 11 defendants charged in a scheme involving the manufacture and sale of millions of bottles of the liquid dietary supplement 5-Hour ENERGY.
On November 28, 2016, a jury in San Jose found Joseph Shayota, 64, and his wife, Adriana Shayota, 45, (the Shayotas) guilty of conspiracy to traffic in counterfeit goods, as well as conspiracy to commit criminal copyright infringement and to introduce misbranded food into interstate commerce. The criminal conduct began in late 2009 and ran through October 2012. Over 3,700,000 bottles of counterfeit 5-Hour ENERGY were placed in the stream of interstate commerce.
Besides the Shayotas, other defendants charged with various roles in the scheme include: Justin Shayota, 33, of Spring Valley, Calif.; Walid Jamil, 57, of Troy, Mich.; Raid Jamil, 48, of West Bloomfield, Mich.; Kevin Attiq, 52, of El Cajon, Calif.; Fadi Attiq, 59, of El Cajon, Calif.; Leslie Roman, 63, Rancho Cucamonga, Calif.; Mario Ramirez, 56, of San Diego; Camilo Ramirez, 32, of San Diego; and Juan Romero, 70, of Mexico City, Mexico.
“Acting out of pure greed, these defendants gambled with the health and safety of millions of users of this well-known consumer product," said U.S Attorney Brian Stretch. "Consumers can rightly expect that the commercial products they buy are safe to ingest. Those individuals who manufacture and distribute unsafe counterfeit food products will be prosecuted and sent to jail.”
“By trafficking in counterfeit dietary supplements, Joseph Shayota and Walid Jamil led an organized criminal conspiracy that violated intellectual property rights and endangered the health and safety of the public for their own financial gain,” said Special Agent in Charge Bennett. “The FBI is committed to identifying, arresting, and prosecuting those who defraud US businesses and put consumers at risk in an attempt to line their own pockets. I want to thank the FBI special agents and analysts, as well as our partners at the FDA and U.S. Attorney’s Office, for their tireless work on this investigation.”
“Criminals who mislead unsuspecting U.S. consumers by selling them counterfeit and false-labeled products cheat the American consumer and endanger the public’s health,” said Special Agent in Charge Malinowski. “We will continue to protect the U.S. consumer by working to bring to justice those who place profits above public health.”
At trial, the evidence demonstrated that the Shayotas, through their company Tradeway International Inc., (doing business as Baja Exporting, LLC), entered into an agreement with Living Essentials, LLC, to distribute 5-Hour ENERGY in Mexico. Living Essentials owns 5-Hour ENERGY and registered and owns all 5-Hour ENERGY trademarks and related copyrights. The company does not grant licenses to any individual or entity to manufacture 5-Hour ENERGY. As part of the distribution agreement, Living Essentials manufactured and provided the Spanish-labeled 5-Hour ENERGY bottles to the Shayotas, who were unable to sell it in Mexico. The Shayotas and their co-conspirators then removed the Spanish-language labels and replaced them with counterfeit English-language labels. They also removed the true lot numbers and expiration dates placed on the bottles by Living Essentials and replaced them with false lot numbers and expiration dates. The Shayotas and their co-conspirators sold this counterfeit-labelled product throughout the U.S.
The government filed a Superseding Information on June 29, 2016, charging each of the defendants with one count of conspiracy to traffic in counterfeit goods, in violation of 18 U.S.C. §2320(a), and one count of conspiracy to commit criminal copyright infringement and to introduce misbranded food into interstate commerce, in violation of 18 U.S.C. § 371. Following this afternoon’s sentencing, the disposition as against eight of the defendants is as follows:
Charges and Disposition
Joseph Shayota
Found guilty by a jury on November 28, 2016, of
Conspiracy to Traffic in Counterfeit Goods, in violation of 18 U.S.C. § 2320(a), and Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Misbranded Food into Interstate Commerce, in violation of 18 U.S.C. § 371.
Sentenced June 20, 2017, to 86 months in prison, 3 years of supervised release, a $144,868 fine, and forfeiture of $750,000.
Adriana Shayota
Conspiracy to Traffic in Counterfeit Goods, in violation of 18 U.S.C. § 2320(a) (Count One), and Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Misbranded Food into Interstate Commerce, in violation of 18 U.S.C. § 371 (Count Two).
Sentenced June 20, 2017, to 26 months in prison, 3 years of supervised release, and a fine of $144,868.
Pleaded guilty on
October 7, 2016, to Conspiracy to Traffic in Counterfeit Goods, in violation of 18 U.S.C. § 2320(a) (Count One), and Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on April 26, 2017, to 84 months on Count One and 60 months on Count Two, to be served concurrently; three years of supervised release; and $555,801.32 in restitution to Living Essentials.
Pleaded guilty on September 23, 2016, to Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on May 24, 2017, to 32 months’ imprisonment, 3 years supervised release, and restitution of $91,065.91 to Living Essentials.
Raid Jamil
Pleaded guilty on September 13, 2016, Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on May 17, 2017, to 24 months’ imprisonment, and three years of supervised release, and $268,936 in restitution to Living Essentials. This sentence was ordered to run consecutive to a 6-month sentence imposed in a separate case in the Eastern District of Michigan under Docket No. 16-CR-20623-001-JCO.
Kevin Attiq
Pleaded guilty on November 4, 2016, to Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on June 14, 2017, to three years of probation (to include eight months of home confinement) and a $20,000 fine.
March 2, 2016, to Conspiracy to Traffic in Counterfeit Good, in violation of 18 U.S.C. § 2320(a), and Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on June 14, 2017, to six months’ imprisonment, six months’ home confinement, three years of supervised release, and $555,801.32 in restitution to Living Essentials.
Pleaded guilty on November 9, 2016, to Conspiracy to Commit Criminal Copyright Infringement and to Introduce
Sentenced on February 15, 2017, to five years of probation (to include six months home confinement) and a $30,000 fine. Agreed to pay restitution of $133,606.09 to Living Essentials.
The government referred defendants Camilo Ramirez and Fadi Attiq to pre-trial diversion and Juan Romero remains a fugitive. The charges against Romero are merely allegations that crimes have been committed. As with all defendants, he must be presumed innocent until proven guilty beyond a reasonable doubt.
Joseph and Adriana Shayota both were ordered to surrender on September 6, 2017, to begin serving their respective sentences.
Assistant United States Attorneys Matt Parrella, Susan Knight, and Joseph Springsteen are prosecuting the case with the assistance of Lakisha Holliman and Elise Etter. Assistant United States Attorney David Countryman assisted with forfeiture matters. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Food and Drug Administration Office of Criminal Investigations.