Home St. Louis Press Releases 2009 Business Manager for National and International Counterfeit Goods/Spam Operation Pleads Guilty
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Business Manager for National and International Counterfeit Goods/Spam Operation Pleads Guilty

U.S. Attorney’s Office August 07, 2009
  • Eastern District of Missouri

ST. LOUIS, MO—Jody M. Smith, a business manager of an illegal, international business selling counterfeit goods and illegal pharmaceuticals, has pleaded guilty to conspiracy charges, Acting United States Attorney Michael W. Reap announced today.

According to the facts filed with the court, from 2004 and until October 2008, Jody M. Smith was a business manager of an illegal, international business that sold counterfeit goods and operated an illegal Internet pharmacy. The business often relied on spam e-mail to advertise the sale of counterfeit goods and Internet-based pharmacy services, and to solicit customers of such goods and services. A person believed to be operating in Romania recruited people to send spam e-mail messages advertising counterfeit goods and Internet pharmacy services. The people who sent the spam advertising messages, "spammers," were paid a commission based on the volume of sales they generated. Smith paid more than $2,000,000 in commissions. A person believed to be living in Asia was responsible for supplying and shipping counterfeit goods and pharmaceuticals into the Eastern District of Missouri, and elsewhere.

Part of the conspiracy involved the sale of counterfeit, high-end consumer goods such as high quality counterfeit Rolex® watches with trademarks which were almost identical to the legitimate marks. The counterfeit goods were typically shipped into the United States from China. In some cases, products were ordered and paid for but never received.

The conspiracy also involved the illegal sale of prescription drugs via an Internet-based pharmacy. The investigation revealed that the Internet pharmacy offered for sale, sold, and shipped prescription drugs in the United States without requiring purchasers to provide or obtain a legally required prescription. Records indicate that the pharmaceuticals were typically shipped into the United States from India.

Jody Smith’s involvement in the conspiracy included setting up businesses and accounts that were used for facilitating payment processing for orders and for paying spammers' commissions. One of the payment systems he used is known as ePassporte. Based on records seized during the investigation, the infringement value of illegal goods sold exceeded $1,000,000.

“At the least, these online schemes are a nuisance to people who get them as spam on the Internet,” said John V. Gillies, Special Agent in Charge of the FBI in St. Louis. “But at its worst, these schemes can be a threat to people’s lives. People who cannot afford to see a doctor to get a prescription have been put at risk for using counterfeit drugs from such fraudulent online businesses.”

Smith, 30, McKinney, Texas pleaded guilty to one felony count of conspiracy to traffic counterfeit goods. He appeared before United States District Judge Rodney W. Sippel.

He now faces a maximum penalty of five years in prison and/or fines up to $250,000 when he is sentenced on October 23, 2009.

Reap commended the work on the case by the Federal Bureau of Investigation; and Assistant United States Attorneys John Bodenhausen and Matthew Drake, who are handling the case for the U.S. Attorney’ office.

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