Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced the unsealing of indictments charging three automotive parts suppliers with selling counterfeit replacement parts. The three men—Shashi Malhotra, Fadi Kilani, and Richard Dininni—were arrested at their homes earlier this morning. Malhotra and Kilani will be presented in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein this afternoon. Dininni will be presented in federal court in Allentown, Pennsylvania.
Manhattan U.S. Attorney Preet Bharara said, "As alleged, these defendants sold the automobile replacement parts equivalent of designer knock-offs but represented to their unsuspecting customers that they were buying the 'name brand.' And while their replacement parts may have been no different from many other generic parts sold every day in the aftermarket, they were able to command the same higher prices charged by the automobile manufacturers' whose names they stole. We encourage those who think they may have purchased counterfeit parts from these defendants or from anyone else to call the numbers listed at the end of this release."
FBI Assistant Director in Charge George Venizelos said, "While it is not generally against the law to sell replicas or imitations, it is illegal to try to pass them off as authentic or original. Likewise, there is a legitimate market for aftermarket auto parts, but these defendants allegedly packaged parts to appear to be original manufacturer equipment and sold them as such. That isn't legitimate; it's fraud."
New automobiles sold to consumers are equipped with automotive parts that are manufactured or provided by the automobile's manufacturer ("Original Equipment Manufacturer" or "OEM"). When a consumer needs to replace a part in an automobile, he or she can purchase either parts made by OEMs, which are sold under the OEMs' brand names; or generic parts made by other manufacturers that are commonly referred to as "aftermarket" parts. Generic parts are regularly bought and sold lawfully as aftermarket parts, typically at lower prices than OEM parts. Many types of aftermarket parts—including those sold and falsely packaged as OEM parts by Malhotra, Kilani, and Dininni—do not have to meet independent federal safety standards.
From October 2011 through February 2013, Malhotra, who operated Worldwide Auto Parts and S&S International Products and Manufacturing in Paterson, New Jersey, and Kilani, who operated Cypros Trading and Shipping in Paterson, New Jersey, conspired to sell counterfeit OEM parts. Specifically, the defendants and their co-conspirators deceptively packaged and caused to be packaged certain aftermarket automotive parts—including brakes, brake pads, brake shoes, ignition coils, water pumps, window regulators, suspension sway bar links, wheel hubs, anti-lock braking sensors, control arm bushings, transmission filters, pitman arms, tie rod ends, and suspension air springs—to falsely make it appear as though these parts had been manufactured by OEMs such as Ford Motor Company, General Motors, and Federal Mogul (the "manufacturers").
They sold these parts to individuals and entities that they understood would re-sell them to the general public and to certain automotive repair shops, including repair shops that service New York City's taxis and limousines, which are subject to separate and regularly scheduled safety testing by the New York City Taxi and Limousine Commission. Malhotra obtained some of these counterfeit parts from China, and Kilani exported some of these counterfeit parts to Saudi Arabia.
Similarly, from November 2011 through June 2012, Dininni, who operated Professional Parts USA in Easton, Pennsylvania, also conspired to sell counterfeit OEM parts. Along with his co-conspirators, Dininni also deceptively packaged and caused to be packaged certain aftermarket automotive parts, including brake pads and water pumps to falsely make it appear as though these parts had been manufactured by OEMs. Dininni and his co-conspirators then sold these parts to individuals and entities that they understood would re-sell them to the general public and to certain automotive repair shops, including repair shops that service New York City's taxis and limousines.
Malhotra, 67, of Norwood, New Jersey; Kilani, 28, of Englewood, New Jersey; and Dininni, 57, of Easton, Pennsylvania, are each charged with one count of conspiracy to traffic in counterfeit goods, which carries a maximum sentence of five years in prison, and one count of trafficking in counterfeit goods, which carries a maximum sentence of 10 years in prison.
As the U.S. Attorney's Office and the FBI identify individuals and entities that may have purchased counterfeit automotive parts from these defendants, both will make appropriate notifications. If you believe you may have purchased any counterfeit automotive parts from these defendants or anyone else, you may wish to have your car inspected at an authorized and qualified vehicle inspection facility to determine whether the parts in question are counterfeit.
Bharara praised the outstanding investigative work of the FBI. He also thanked U.S. Customs and Border Protection, Immigration and Customs Enforcement's Homeland Security Investigations, and the U.S. Department of Commerce for their assistance with this investigation.
This case is being handled by the Office's Complex Frauds Unit. Assistant U.S. Attorneys Joseph Facciponti and Christopher D. Frey are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the asset forfeiture aspects of the case.
The charges contained in the ndictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.