In a complaint filed at the US District Court for the District of Rhode Island on May 21, the Department of Justice stated that Kohanbash operated and controlled California Surplus, Inc.; Gan Eden, LLC; and FR-HQ, LLC.
"Gan Eden, LLC owned the warehouse location in Elizabeth, New Jersey, at which Kohanbash stored military uniforms and gear wholesaled by him through California Surplus, Inc. and FR-HQ, LLC," according to the filing. On Tuesday, Kohanbash was charged with wire fraud and trafficking in counterfeit goods. The co-conspirators involved in the case were not named.
After being manufactured in China, the counterfeit products were allegedly sent to Kohanbash and then sold to wholesalers with false certification letters stating that the goods were produced in the US. The wholesalers then sold the products, falsely labeled as US-made goods, to military and government buyers.
According to a Tuesday press release by the US Department of Justice, Kohanbash and his co-conspirators "provided, reviewed and approved photographs, descriptions and samples of tags and labels to be attached to the knockoff products" so they appeared legitimate. In many cases, that involved copying the trademarks and brand names of legitimate US-manufactured products and attaching them to counterfeit items.
The products included military parkas used by US Air Force personnel in Afghanistan. According to the Department of Justice press release, the parkas are supposed to be manufactured from a fabric called Multicam, which uses near-infrared management technology to ensure personnel are undetectable. Two hundred counterfeit Multicam parkas without near-infrared management technology were sold to a US Air Force Base Supply Center. Other counterfeit products included attire labeled as "permanently flame resistant," even though they were not.
According to the Department of Justice, the Berry Amendment and the Trade Agreements Act under US law mandate that goods sold to the military and government be manufactured in the US or another designated country. China is not a designated country under US law.
Kohanbash is expected to make his first court appearance before US Magistrate Judge Patricia A. Sullivan in Rhode Island on June 12. Conspiracy to commit wire fraud can result in up to five years in federal prison, three years supervised release as well as a fine of up to $250,000, while trafficking in counterfeit goods is punishable by up to 10 years in federal prison, three years supervised release and a fine up to $250,000.