More than £200K criminal assets to be repaid after Central Bedfordshire investigation
Criminal assets worth £213,166.09 have been awarded during a Proceeds of Crime confiscation proceeding after a large-scale, international counterfeiting operation was uncovered by Central Bedfordshire trading standards.
The investigation, undertaken in conjunction with the Federation Against Copyright Theft (FACT), revealed that an internet sales website offering films, games and music was back up and running after a previous investigation in 2009 had led to significant custodial sentences for two individuals, who claimed that they were working for Chinese who ran the enterprise.
This was corroborated, as the computers in the counterfeiting factory were being controlled from China at the time of the search and arrest. Also at this time a mobile phone in the property was to receive a call from China, the caller being identified as Ken.
In November 2010 FACT discovered that the website was back up and running and a complaint was made to Central Bedfordshire Council and a new investigation commenced. Assistance was obtained from the offset from one of Central Bedfordshire’s financial investigators, who discovered that payments amounting to hundreds of thousands pounds were being made via PayPal and the accounts were re-directing money to bank accounts in China.
The website gave the impression that the products were being sent directly from China. However enquiries were to reveal that the purchases were being posted from within the UK, this being later identified as the Islington area of London.
Following enquiries being made in the London area one of the defendants Wai Kong Man was identified as being the person who was both posting the purchased DVD’s and running what was suspected to be a DVD counterfeiting factory from a flat located at Offord Road, London N1. Further investigation took place and the second defendant, Kin Man Chan was identified as Ken the same Ken that appeared in the previous investigation. He had no identified income in the UK and although at the time resided predominantly in China, also had a home in Stanmore area of London.
Financial evidence linked Kin Man Chan to buying equipment used in counterfeiting DVD’s as far back as 2005. The financial evidence also linked him with buying computer equipment that was supplied to the defendant Man at the Offord Road address. All evidence pointed to Kin Man Chan being one of the main organisers running the counterfeit business.
On 18th May 2012, search warrants were executed at the Offord Road address, the home of the Wai Kong Man on the Banbury Estate, London NW1, and the home of Kin Man Chan in The Highway, Stanmore, London.
Officers discovered that the Offord Road address was set up for the mass production, labelling and packaging of DVD’s, and that a high-tech computer was set-up to facilitate the downloading and copying of films from a server located outside of the UK. Man was arrested at his home, where a further computer system being used in the small scale copying and production of DVD’s was also seized. Chan was arrested at his home address, where officers seized a laptop and computer that were used to access both the computer at Offord Road and the website. A large quantity of postage stamps used to post the counterfeit DVD’s to customers and documents relating to the purchase of a number of properties was also seized.
Following arrest Man was interviewed and admitted to the production of counterfeit DVD’s and posting them to customers. He stated he was working for another person, but would not divulge who this was.
Man was granted bail following being charged with a conspiracy to supply counterfeit goods.
Chan was also interviewed and denied being the man in charge of the counterfeiting factory and running the internet site. He was to limit his involvement in the criminal enterprise to assisting an old friend, ‘Mr Man’ with technical issues about computers, carrying out repairs and buying items used in the running of the counterfeit factory. He was to admit that he knew that illegal copying of DVD’s was taking place at Offord Road. He was further to admit he knew both of the individuals prosecuted in the initial investigation, was aware of their criminal enterprise and had bought properties with their assistance. He claimed he lived most of his time out of the UK in mainland China. Chan was charged with conspiracy to supply counterfeit DVD’s and was remanded in custody on 19th May 2012.
Following the committal of the case to the Crown Court there was a hearing at Luton Crown Court where Man pleaded guilty to his part in the case. Chan was to plead guilty, but with a basis of plea that he was not the main person involved in the counterfeiting and did not receive any of the funds. His plea was not accepted by the Prosecutor. There followed a Newton Trial of issue before the Crown Court at Luton that was concluded on the 15th March 2013. It was to determine the full extent of the involvement of Chan in the conspiracy. Evidence had been obtained from Chan’s computers that they had been used to interact with the computers at the DVD factory in Offord Road, whereas the laptop had been used to access the management/running of the website and had been used in the payment of fee’s to register the site. Evidence had been obtained where Chan had purchased a specialist piece of computer equipment to the value of nearly £3000. That computer equipment had been recovered in Offord Road. Following the evidence being heard in the Newton Trial HHJ Foster found Chan to be ‘a senior figure engaged in the running of the counterfeit business for a period from 2005 until his arrest in 2012.
In May 2013 Mr Chan was sentenced to 30 months in prison and Mr Man to 12 months.
In January this year, the Proceeds of Crime hearing was heard at Luton Crown Court. The Court held that Mr Chan had benefitted from criminal activity to the tune of £321,307.89, and he was ordered to pay back £213,166.09 (the available amount).
After the proceedings, Councillor Brian Spurr, Executive Member for Sustainable Communities, Services at Central Bedfordshire Council said: "This joint investigation by our Trading Standards team and Financial Investigation Unit and FACT has been going on for some time and we're extremely pleased that together we were able to put a stop to this. We will not tolerate people profiting from crime and hope this puts other people off carrying out this type of illegal activity."
Kieron Sharp, FACT Director General, added, "Criminals seeking to profit from counterfeiting the creative works of FACT members risk imprisonment as well as seizure of assets obtained through their activities.
“Kin Man Chan was a crucial part of an international criminal organisation that flooded the UK with counterfeit products and returned nothing from his enterprise to content creators or legitimate retailers.
“The work done by the Central Bedfordshire financial investigation unit alongside FACT’s investigators was crucial in identifying the flow of money and the operation of the business.
Criminal activity on this scale threatens the livelihoods of the two million people working in the UK’s creative industries and harms legitimate businesses."
For further information on the criminal case or if you would like the assistance of a Financial Investigator to look into any cases you have please contact Central Bedfordshire Council on 0300 300 6017 or email Christopher.Jones4@centralbedfordshire.gov.uk