'Brothers ran counterfeit clothing operation which could have caused potential loss of €3m to multinational clothing companies'
Published 01/07/2015 | 17:15
Two men have received suspended jail terms for their part in a counterfeit clothing operation which could have caused a potential loss of €3million to multinational clothing companies.
Brothers, Erol and Ali Basak ran the operation from a lock up container in Tallaght, south Dublin. Gardai raided the premises and found it was fitted out as a workshop with sewing machines, heat presses for pressing transfers and presses to press labels onto footwear.
Gardai also seized clothing which had trademarks logo for well known clothing companies sewn on to them. They found around quarter of a million unused trademark labels for clothing companies Adidas, Nike, Converse, North Face, Abercrombie and Fitch and Superdry.
Brand protection agents from the multi-national companies inspected the clothing and estimated that the finished items would have resulted in an estimated loss to the companies of €65,000.
Detective Garda Gareth Lynch told Dublin Circuit Criminal Court that the agents estimated that if all the unused labels had been used to produce counterfeit items the companies estimated the loss to them would be €3 million.
These figures are based on the assumption that each purchase of a counterfeit item resulted in a lost sale of a non-counterfeit item. The counterfeit items were being supplied to marts or Sunday markets around the country.
Erol Basak (43) of Liffey Park, Lucan, Co Dublin had pleaded not guilty to twelve counts of fraudulent possession of goods bearing trade marks and eleven counts of fraudulent application of trade marks. A jury unanimously convicted him of all charges, committed on dates in November 2012 at the premises in Cedar View, Corbally, Tallaght.
Ali Basak of Edenderry, Co Offaly and formerly of Hannah Square, Saint Edmunds, Lucan pleaded guilty before his brother’s trial to similar offences, which are contrary to section 92 of the Trade Marks Act, 1996.
Judge Mary Ellen Ring suspended a sentence of two and a half years imprisonment on both men on condition that they each pay €5,000 by December 2017. She said €2,000 of this should go towards the expenses incurred by the State in having to fly over and accommodate trademark witnesses from the clothing companies.
She noted that both men have previously unblemished records and are unlikely to re-offend.
Judge Ring asked what would be done with the counterfeit clothes seized by gardai. It is normal that the evidence in a criminal trial is destroyed after sentence is passed.
She said: “It seems to me that to destroy clothing that is useful is inappropriate”. She noted that there were many organisations such as Focus Ireland would could make good use of them.
Paul Carroll BL, prosecuting, said there may be legal provision for the District Court to deal with items in another way but said the issue is that the counterfeit labels are on the items.
Judge Ring said the multinational companies would not want the items back, adding: “I’d be surprised if a charitable donation of their clothing would be something that would stand in the way of”.
She noted that in 2013 Erol Basak had himself arranged for the exportation of nearly 12,000kg of clothes as a charitable donation to victims of the Syrian crisis.
Both men are Turkish nationals. Father of five Erol Basak is an Irish citizen. His brother had worked as a waiter in the capital before this offending.
Erol Basak had registered a legitimate clothing importation company called "Majestic Textiles Ltd” and had obtained contracts supplying work and school uniforms.
He would buy unbranded items and put the relevant school or company logos onto the clothing using sewing machines or clothes presses.
After business took a downturn in the recession he was no longer able to pay the rent of his business premises and began operating from the attic of his own home.
Morgan Shelly BL, defending Erol Basak, said that his stock became musty then and he moved them into containers.
Ali Basak met some people at Sunday markets around the country and they obtained the counterfeit logo labels. The pair would put the labels on and sell them wholesale to market traders.
Eanna Molley SC, defending Ali Basak, said his client had studied in Portobello college and gone on to complete post graduate studies in economics.
He handed in a reference from Prof John O’Hagan who described him as a busy student and said his dissertation was on the Turkish banking crisis from 2001 to 2003.
Mr Shelly said his client had engaged in charitable works. He has since left the clothing business and he is seeking to import specialist Turkish goods into Ireland and to export Irish goods to Turkey
The court heard that their clothing company had engaged in some legitimate business and had paid VAT and duty for the importation of the unbranded clothing.
Det Gda Lynch said there were no VAT records on the sales to the markets.