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Shop owner gets year for selling fake GM devices

SoVaNow.com / January 14, 2013
A former Riverdale business owner has been sentenced to serve one year and one day in federal prison for selling counterfeit General Motors automotive diagnostic devices.

Justin DeMatteo, 31, of Saxe, operator of The Shop in Riverdale, was sentenced Friday in Alexandria by Senior U.S. District Judge Claude M. Hilton in the Eastern District of Virginia, following his Sept. 26, 2012 guilty plea to one count of trafficking in goods bearing counterfeit marks.

In addition to his prison term, DeMatteo was sentenced to three years of supervised release and ordered to pay restitution of $328,500, the full amount of GM’s losses.

At DeMatteo’s plea proceeding, the court entered a consent order requiring him to forfeit $109,074 in criminal proceeds and property and contraband seized during the execution of search warrants at his business and home on Dec. 15, 2011. On that day FBI agents swarmed The Shop around mid-morning, but would make no comment on their purpose of being there.

The counterfeit devices, made by unauthorized Chinese manufacturers, were fraudulently branded as GM Corporation-branded “Tech 2” vehicle diagnostic systems. The hand-held computers are used by auto mechanics to identify problems with and assure the safety of motor vehicles.

In court documents, DeMatteo admitted he sold the counterfeit diagnostic systems between January and May 2011. He also admitted to selling related equipment, CANdi modules — the Controller Area Network diagnostic interface — which contain a GM diagnostic interface for newer vehicles that is necessary to communicate with future on-board computer systems. The fake modules bore counterfeit GM marks.

He sold the counterfeit Tech 2 units on eBay and accepted payment via PayPal. In many cases DeMatteo had the equipment drop-shipped directly from Chinese maunfacturers to U.S. customers.

During the Dec. 15, 2011 search of his business and home, federal agents seized numerous counterfeit GM Tech 2 units and CANdi modules, and various computer equipment and documents that contained evidence linking DeMatteo to the sale of the counterfeit Tech 2 units.

The number of Tech 2 and CANdi units sold by DeMatteo or seized during the searches totaled nearly 100. The retail price of 100 authentic products would have been more than $380,000, according to court documents.

Announcement of the sentence came from the U.S. Attorney for the Eastern District of Virginia, Neil H. MacBride, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Assistant Director Ronald T. Hosko of the Criminal Investigative Division and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office.

The case was prosecuted by Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and trial attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section, and was investigated by the FBI’s Intellectual Property Rights Unit and the FBI Richmond Division. The investigation was conducted as part of “Operation Engine Newity,” an international initiative targeting the production and distribution of counterfeit automotive products that threaten the safety of the consumer

The sentencing announced on Friday was the result of one of many enforcement efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work.

To learn more about the IP Task Force, go to http://www.justice.gov/dag/iptaskforce/





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