Electrical product counterfeiters pay heavy price in Canadian courts

NORTHBROOK, Ill., May 22, 2007 -- Underwriters Laboratories (UL) announced today a guilty plea obtained in the case of an Ontario import-export firm stemming from previous charges against two individuals by the Royal Canadian Mounted Police (RCMP) in connection with the sale and distribution of dangerous consumer electrical products bearing counterfeit UL marks.

The sentence was imposed by Ontario Court Judge Ramez Khawly on April 10, 2007 on Cana Import Export Ltd., which was found guilty on two counts of fraud for dealing in counterfeit products. Each count carries a fine of C$20,000 with six months to pay or three months in jail for default on the first count, and one year to pay or three months in jail on the second count.

Saleem Khan, 59, of Toronto, was identified as director for Cana responsible for payment of the fines or subject to imprisonment if found in default by the court. Khan was also found guilty on two counts of possession of counterfeit products, with one-year probation under a plea agreement. He and a relative were arrested in 2005 after a two-month investigation.

During the initial search of Cana's outlet and warehouse in Etobicoke, Ontario, police seized over 500 electrical power strips, nearly 1,000 orange heavy-duty extension cords, and 5,000 various household extension cords. Samples of the bogus electrical products--which were determined to bear forged UL safety certification markings--failed standard UL safety tests.

Of particular concern was a white extension cord, manufactured with thin telephone wire and a brittle, easily broken plastic coating, which likely retailed for a few dollars but cost far less to produce. When tested by UL, the extension cord melted and caught fire within a few minutes. The seized outlet strips were also found to have undersized wiring and no surge suppression. They were further found to have reverse polarity wiring, which is a shock hazard, and a plastic casing that ignited immediately upon testing since it was not made of fire-resistant material.

While only a very small percentage of products and/or packaging may be found to bear a counterfeit UL mark, such products have not undergone UL's testing and certification process and thus could pose significant safety risks to consumers.

Counterfeit products are typically high-volume, low-cost items such as extension cords and power strips, primarily manufactured in Asia and sold through discount retailers and unconventional outlets such as flea markets.

"We appreciate the responsiveness and hard work of the RCMP in helping to bring about these successful prosecutions, which reinforce UL's zero-tolerance policy toward counterfeiting as we aggressively defend the integrity of UL certification marks worldwide," said Brian Monks, Vice President of Anti-Counterfeiting Operations.

In addition to posing a threat to public safety and the individual consumers who purchase them, counterfeit products defraud retailers who are selling legitimate products and undermines public confidence in the safety certification process. Counterfeiting is estimated to account for five to seven percent of global trade, or about USD$500 billion each year. Internationally, Interpol has indicated that organized crime and terrorist groups are now involved in the trade of counterfeit products, with profits from these sales financing other areas of criminal and terrorist activities.

In addition to the RCMP, UL works with the Canada Border Services Agency (CBSA) and provincial safety authorities across Canada. UL also works with U.S. Customs, the FBI, state and local authorities, the World Customs Organization (WCO), Interpol, the U.S. Chamber of Commerce, the International Trademark Association (INTA), and the International Anti-Counterfeiting Coalition (IACC).

Source: Underwriter's Laboratories