Hierarchical agents sell counterfeit "Rolex" watches, involving hundreds of millions of yuan and 26 people were sentenced!

Buying a domestic watch movement, branding it with a "Rolex" famous watch tag, and then assembling and sealing it by itself, and selling it through the circle of friends, involving hundreds of millions of yuan......

On April 25, the Supreme People's Procuratorate released a typical case of intellectual property protection by the procuratorate, revealing the details of the case of the extraordinarily large production and sale of counterfeit watches.

Acting as an agent for the sale of "Rolex" watches

The amount of crime is as high as hundreds of millions of dollars

From July 2015 to April 2021, Xu Moujun, Zhuang Moukuan and others, without the permission of the owner of the registered trademark "ROLEX", partnered to lease warehouses in Panyu District, Guangzhou City and other places to purchase unmarked watch movements, and entrusted Hou Mouyan and others to disassemble the movements and engrave the "ROLEX" logo, and purchased watch straps, cases and other spare parts engraved with the "ROLEX" logo from Cai Mouxing and others.

Xu Moujun and others hired Zeng Moufeng and others to assemble, and after quality inspection and packaging, they sold to first-level agents such as Wang, and then sold to second- and third-level sales agents such as Yu Mouran. Agents will promote through online platform advertising and drainage, set up sales WeChat groups, physical store sales and other external sales.

On February 19, 2021, the Runzhou Branch of the Zhenjiang Public Security Bureau of Jiangsu Province (hereinafter referred to as the "Runzhou Public Security Bureau") received a number of reports of citizens buying counterfeit Rolex watches, and filed a case for investigation on suspicion of counterfeiting registered trademarks by Yu Mouran and others.

After investigation, the amount of illegal business operations of the above-mentioned persons ranged from more than 230,000 yuan to more than 332 million yuan, and the illegal income ranged from 50,000 yuan to more than 20.75 million yuan.

Dig deep into the source of counterfeiting

Achieve full-chain strikes

The Procuratorate of Zhenjiang Economic Development Zone (hereinafter referred to as the "Procuratorate of Zhenjiang Economic Development Zone") was invited to send personnel to intervene in the investigation, and in view of the fact that the watch movement is a regular product purchased from the manufacturer, and the quality of the assembled products meets the relevant standards, it is recommended that the public security organs focus on the investigation of trademark infringement crimes:

In this case, due to the buyer's dissatisfaction with the after-sales service, the preliminary investigation direction is mainly aimed at the counterfeiters at the end of the chain, and it is recommended to analyze the transaction details, purchase orders, logistics information, and WeChat users of the sellers at the end of the chain to comprehensively trace the upstream crimes, and find out the source of sales of the infringing goods, the operation mode and the organizational structure in accordance with the law.

It is important to verify whether the suppliers of spare parts and the general sales agents of the first-level sales who only participate in the sale of counterfeits constitute a joint crime with the counterfeiters. In view of the fact that Cai Mouxing and the other 9 persons lacked joint criminal contact with the person who assembled and produced the fake watch, and it was difficult to determine the joint crime, based on the name and use of the straps and cases of the counterfeit "ROLEX" registered trademark, it was determined that the goods approved for use with the registered trademark were "the same kind of goods", and their production and sale of spare parts separately constituted the crime of counterfeiting registered trademarks, and the amount of illegal business was calculated separately based on the selling price and quantity of the above-mentioned spare parts. For Wang and other sales agents who only sell counterfeit watches and do not participate in counterfeiting, it is determined that the crime of selling goods with counterfeit registered trademarks is constituted.

Through the accounting books of the counterfeiting and selling gangs and the more than 230 bank cards involved in the case, the amount of each criminal suspect was calculated by combing and auditing the funds, and combining the verbal evidence of the persons involved in the case.

Considering that the production and sale of counterfeit goods in this case has a clear hierarchy, a clear division of labor, and a large number of people involved in the case, in the early intervention stage, the procuratorate recommends that the whole case be handled by category based on the overall circumstances of the case and the circumstances of each person's involvement. For example, custodial coercive measures should be taken against those who produce and sell counterfeit goods; it is recommended that non-custodial coercive measures be taken against those involved in the case who have a good attitude of admitting guilt and repentance, play a relatively small role, make relatively little profits, and pose little danger to society; and those who only receive a small amount of fixed wages and whose circumstances are obviously minor may not be treated as crimes.

From July 2021 to January 2022, the Runzhou Public Security Bureau successively submitted a request to the Zhenjiang Economic Development Zone Procuratorate for approval of arrest against 8 people, including Xu Moujun, Zhuang Moukuan, Hou Mouyan, and Cai Mouxing, for the crime of selling goods with counterfeit registered trademarks. The Zhenjiang Economic Development Zone Procuratorate approved the arrest of the above 15 people in accordance with the law.

In addition, the Runzhou Public Security Bureau released Zeng Moufeng and the remaining 11 others on bail pending trial.

Additional Leak Charges

Twenty-six people were sentenced

From October 2021 to March 2022, the Runzhou Public Security Bureau successively transferred Xu Moujun and 26 others to the Zhenjiang Economic Development Zone Procuratorate for review and prosecution on suspicion of counterfeiting registered trademarks and selling goods with counterfeit registered trademarks.

The intellectual property prosecution team analyzes and discusses the case.

In this case, the public security organs only determined the fact that Xu Moujun illegally operated more than 130 million yuan from September 2019 to April 2021, but after verifying the bank transaction details and interrogating the persons involved, the procuratorate found that from July 2015 to September 2019, Xu Moujun and Zhuang Moukuan also jointly produced and sold fake watches, and Xu Moujun and Zhuang Moukuan had hundreds of millions of yuan in transactions during this time period, so they prosecuted Zhuang Moukuan. Through further verification of transaction details and strengthening the interrogation of other co-defendants, the amount of Xu Moujun's illegal business operations increased from more than 130 million yuan to more than 332 million yuan, and the public security organs supplemented the transfer for review and prosecution of Zhuang Moukuan, a counterfeiter with an illegal business amount of more than 196 million yuan.

During the review for prosecution phase, the procuratorial organs strengthened their interpretation of the law and reasoning, prompting 22 criminal suspects to admit guilt and accept punishment, and 3 defendants to admit guilt and accept punishment during the trial phase. When submitting sentencing recommendations, fully consider circumstances such as each person's specific conduct, the size of the role, the amount of profits, the harmfulness to society, and the admission of guilt and acceptance of punishment, and it is recommended that actual punishment be applied to the main personnel at the source of the counterfeiting, and that accomplices and sellers who have a good attitude of admitting guilt and repentance and who involve a small amount of money involved in the case be lenient in accordance with law.

In addition, in order to protect the legitimate rights and interests of the right holder in accordance with the law, the procuratorate visited the right holder's agency in China, informed the rights remedies and the progress of the litigation, and listened to opinions on the authenticity of the goods involved in the case and the scope of the goods approved for use in the trademark registration certificate.

From December 2021 to March 2022, the Zhenjiang Economic and Technological Development Zone Procuratorate prosecuted Xu Moujun and 26 others for the crime of counterfeiting registered trademarks and selling goods with counterfeit registered trademarks.

From June to July 2023, the Zhenjiang Economic Development Zone Court made a first-instance judgment, adopted the prosecution opinions and sentencing recommendations of the procuratorate, and sentenced the defendants Xu Moujun, Zhuang Moukuan, Hou Mouyan, Cai Mouxing, Zeng Moufeng and 14 others to fixed-term imprisonment and fines ranging from 60,000 yuan to 50 million yuan for the crime of counterfeiting registered trademarks; Yu Mouran and 12 others were sentenced to fixed-term imprisonment ranging from two years to five years and seven months, and fines ranging from 130,000 yuan to 3 million yuan, and some were given suspended sentences. None of the defendants appealed, and the judgment has entered into force.

[Source: Procuratorate Daily Justice Network (ID: JCRB_ZYW) Author: Yang Jingru]