Bloomberg News

Fake SpongeBobs, Dangerous Spider-Men Spur U.S. Charges

February 06, 2013

Five people accused of importing hazardous and counterfeit toys into the U.S. from China pleaded not guilty to federal charges in a New York court.

Chenglan Hu, 51, Hua Fei Zhang, 52, Xiu Lan Zhang, 60, Guan Jun Zhang, 29, and Jun Wu Zhang, 28, entered their pleas before U.S. Magistrate Judge Ramon E. Reyes Jr. in Brooklyn, New York.

The individuals, all residents of Queens, New York, imported knockoff toys featuring Spider-Man, SpongeBob SquarePants, Dora the Explorer and other popular characters as well as toy cars, planes, accordions and dolls that violated U.S. consumer safety laws, according to the government.

The group, which sold merchandise from a Ridgewood, New York warehouse, had toys seized by U.S. customs officials on 33 occasions between July 2005 and January, according to an indictment unsealed today.

They are charged in the filing with 24 separate counts including conspiracy, smuggling, illegal importation and distribution of goods, trafficking in counterfeit goods and criminal copyright infringement.

“For years, the defendants sought to enrich themselves by importing and selling dangerous and counterfeit children’s toys without regard for the law or the health of our children,” Brooklyn U.S. Attorney Loretta E. Lynch said in a statement. “We stand committed to protecting the residents of our communities from those who would engage in such conduct.”

Several Companies

The defendants had several companies including Family Product USA Inc., H.M. Import USA Corp. and ZCY Trading Corp., which they used at various times in order to continue to the scheme, according to prosecutors.

They were arrested today and each was released on $100,000 bail following a brief hearing this afternoon. The government also took custody of six bank accounts and three luxury vehicles from the group, including a Porsche and a Lexus, according to prosecutors.

Seventeen of the previous seizures of products from the group involved toys that were prohibited under Consumer Product Safety Commission regulations because of high lead content, excessive levels of the plastics additive phthalate, small parts that present choking hazards or other issues, according to the government. Those allegedly included toy ponies, dolls, and bubble guns, among other items.

In 16 of the incidents, customs officials found products that violated intellectual property rights, including fake Winnie the Pooh bubble blowers, Hello Kitty wall clocks, Mickey Mouse beach balls and WrestleMania figurines, according to the indictment.

The defendants are related to one another and two of them, Guan Jun Zhang and Jun Wu Zhang, are naturalized U.S. citizens, according to the government.

The case is U.S. v. Hu, 13-cr-68, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in federal court in Brooklyn, New York, at

csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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