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L.A. jewelry store owners plead guilty to selling fake, lead-laden designer jewelry

June 22, 2010 | 10:35 am

Counterfeit jewelery seized by Immigration Customs Enforcement. Credit: Immigration Customs Enforcement The owners of a downtown Los Angeles jewelry store face more than five years in federal prison after pleading guilty to selling knock-off designer costume jewelry -- including names such Bvlgari, Chanel and Tiffany -- that contained hazardous levels of lead, federal authorities said Tuesday. 

Il Keun Oh, 57, his wife Jacqueline Oh, 55, and the woman's brother, 47-year-old Joon Yeop Kim, each pleaded guilty Monday to one count of conspiracy and one count of introducing and delivering a hazardous substance, said Virginia Kice, spokeswoman for Immigration Customs Enforcement.

The couple own the retail and wholesale business Elegance Fashion Mart on East Olympic Boulevard. The brother is a manager. The three originally were indicted by a federal grand jury on 28 felony counts, including smuggling, trafficking in counterfeit goods and money laundering. 

Authorities said the investigation began in 2007 when ICE agents received a tip that counterfeit designer items were being sold out of the Ohs' store.

A confidential informant was able to gain access to a private showroom in the back of the business, where the bulk of the counterfeit merchandise was kept. Investigators said the defendants had displayed one set of items for the public with a few of the phony items scattered in display cases.

Those who gained the trust of the owners were shown the high-end counterfeit goods that included racks of necklaces, earrings and watches. In another room, they had a whole operation in which they sold to businesses in at least four other states, including Texas, Florida, Georgia and Illinois.

ICE agents eventually seized more than 25,000 counterfeit pieces of jewelry and accessories ranging from necklaces, rings, bracelets, watches, hair ornaments and cellphone charms, officials said. The items were manufactured in Qingdao, China.

Among the fake designer brands were Tiffany, Bvlgari, Louis Vuitton, Baby Phat, Chanel, Tous, Bebe, Christian Dior, Van Cleef and Arpels, Hello Kitty and Juicy Couture. If real, the seized products would have had a retail value of more than $18 million.

Lab tests showed some of the counterfeit jewelry seized in the case contained nearly 20 times the amount of lead deemed safe by the Consumer Product Safety Commission for handling by children.  Despite that, the items were labeled as “lead free.”  

“To people who think designer knockoffs are a harmless way to beat the system and get a great deal – buyer beware,” Claude Arnold, special agent in charge of ICE in Los Angeles, said in a statement.  “Part of what you’re paying for when you buy established brands, regardless of the product, is quality control.  As this case shows, when you purchase counterfeit items, you can easily get something you hadn’t bargained for." 

ICE officials said the agency launched 1,400 investigations into intellectual property rights violations in fiscal 2009.  Those cases resulted in 164 indictments, 203 convictions and seizure of more than $62 million in counterfeit goods.

-- Andrew Blankstein

Photo: Counterfeit jewelery seized by Immigration Customs Enforcement. Credit: Immigration Customs Enforcement