Chinese Seller Facing Fake Airbags Charges

“The brands of counterfeit items seized include but are not limited to Honda, Toyota, BMW, Lexus and Audi,” the complaint states. “(His) company specializes in the production of counterfeit airbags, along with other auto products which could pose safety hazards.”

Brenda Dickson, a special agent with Homeland Security Investigations within Immigration and Customs Enforcement, wrote the complaint that charges 27-year-old Dai Zhensong with trafficking in counterfeit goods.

Zhensong is one of three owners of Guangzhou Global Auto Parts International Group Co. Ltd., the company making the fake airbags and sending them here, Dickson said in the affidavit that accompanies the complaint.

A total of 334 counterfeit airbags from the company have been seized to date in Chattanooga, her affidavit states, including six boxes containing 68 airbags that were determined to be counterfeit items by David Makous, of Lewis Brisbois Bisgaard Smith, Honda’s legal counsel.

“It happens all the time,” Makous, of California, said in a telephone interview after Zhensong’s initial appearance in U.S. District Court on Monday. “They were not our airbags, and not up to Honda’s standards.”

He would not comment on the specifics of the case, and there was no testimony in Monday’s hearing about where the fake airbags were sold locally. The counterfeit parts can be used as replacements after factory airbags have deployed.

U.S. Magistrate Bill Carter, with the help of a Mandarin Chinese interpreter speaking over the telephone, made sure Zhensong understood his rights and was appointed an attorney. His preliminary hearing is Sept. 28.

U.S. Assistant Attorney Steve Neff said Zhensong could face up to 10 years in federal prison and up to a $10 million fine, if the criminal complaint results in his indictment and conviction.

“If the proof shows he intended harm, he could face life in prison,” Neff told the court. “At this time we do not have any information that anyone has been injured or died.”

Dickson’s affidavit states Zhensong entered the United States and travelled to Chattanooga on Oct. 4 to meet with customers and discuss the sale of additional counterfeit airbags and other auto parts.

In the affidavit, she said Guangzhou Global manufactures 5,000 items per month for each type of airbag. She also describes what Zhensong told investigators in an interview about how the fake parts are made.

“Zhensong stated that he orders a genuine auto airbag for approximately $1,000 … and reverse engineers them. The original product is torn down and rebuilt with the mechanisms and materials supplied and produced by Guangzhou.”

Moulds are produced using all but one original product part. The moulds are then used for the purpose of production of parts, and the vehicle trademark emblems are purchased through Honda, Toyota, Audi, BMW and other dealerships in China for about $15 each. completely assembles the product using the trademark symbol on each airbag, and advertises the items on the Guangzhou web page, where the trademark symbol is blurred.

Dickson’s affidavit states that Zhensong said the symbols are blurred because “it was trademark violation” and it was illegal to have the symbols advertised.

“After the complete assembly with (Guangzhou parts and) the unauthorized addition of the trademark symbol, Zhensong is able to sell the airbags internationally to buyers, whom he charges approximately $50 to $70 each, far below the value of an authentic airbag (about $1,000),” Dickson states in the affidavit.

Neither Neff nor Dickson — or Zhensong’s appointed attorney, federal public defender Anthony Martinez, would comment outside of the courtroom for this story.

Source – timesfreepress.com, October 2010

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