A man has been sentenced to 16 months in prison for his part in selling counterfeit CDs, which made profits of over £4 million (€4.58m).
This was the largest import of counterfeit CDs seen in the UK, from popular artists such as Rihanna, Olly Murs and Take That.
Michael Hargreaves, of Heysham, Lancashire, in the northwest of England, pleaded guilty to two counts under Section 92 of The Trademarks Act on 22nd March 2018 at Southwark Crown Court in London.
A Police Intellectual Property Crime Unit investigation found that between 2011 and 2013 Hargreaves had imported, distributed and sold high quality counterfeit music CDs, through online selling platforms. He counterfeited CDs from popular music artists such as Adele, Foo fighters and the Beatles.
Hargreaves committed his crimes through a number of companies he ran and controlled. He would import large shipments of CDs from Hong Kong and deliver these to various locations throughout the UK and to his warehouse in Morecambe.
In 2011, a popular online selling platform noticed that a number of seller accounts registered to Michael Hargreaves were selling newly released CDs far cheaper than their normal selling price. These accounts were subsequently blocked.
In 2012, PIPCU received a complaint from the British Phonographic Industry (BPI) relating to the sale of counterfeit CDs. This was following a number of test purchases made by the BPI from one of Hargreaves’ online selling accounts in 2011 and another account in 2012, which identified the CDs as counterfeit.
In December 2012, PIPCU executed a warrant at Hargreaves’ warehouse in Morecambe, where a large quantity of CDs was seized.
Shipments were also seized from Manchester Airport and Stansted Airport in December 2012 and further warrants were carried out in April 2013 at a shop premises and at a UK distribution centre, in which more CDs were seized.
A total of 21,614 counterfeit CDs of 71 different titles were seized.
Hargreaves, was interviewed under caution and subsequently charged with conspiracy to defraud and money laundering under the Proceeds of Crime Act.
“More fake goods, which are often of bad quality, are now being sold online and spotting copies is becoming much harder,” stated Charlotte Beattie, City of London Police Staff Investigator and officer in charge of the case. “Buying fake goods affects legitimate businesses as counterfeit sales drive the profit away from the genuine manufacturer which could result in job losses and in turn affect the economy.”
“Today’s sentencing should serve as a warning to those selling counterfeit goods that the consequences can be severe. We work hard with the support of our partners to investigate and bring intellectual property fraudsters like Hargreaves to justice.”
“This was one of the largest imports of counterfeit CDs in recent years,” noted Kiaron Whitehead, BPI’s General Counsel, who directs the organisation’s Content Protection team. “Hargreaves imported fake CDs of popular artists such as Ed Sheeran, Paloma Faith and The Beatles and sold them to unsuspecting fans who believed they were buying the genuine product.”
“A third of British music fans still love buying CDs – for themselves and as gifts. Whether buying CDs, downloading or streaming, fans want their hard earned money to go to artists and record labels who create the music so that more music can be made.”
“BPI is very grateful for the collaboration with PIPCU to help bring this man to justice. The case sends out a strong message of deterrence to others who steal from the UK’s creative industry that, no matter whether the fraud is online or in the physical world, they will be caught and they will face the consequences.”
“Partnership working is vital in the fight against intellectual property crime,” declared Ros Lynch, Director of Copyright and Enforcement at the Intellectual Property Office (IPO). “I’m delighted that by working together the British Phonographic Industry and the Police Intellectual Property Crime Unit have brought this man to justice. I hope this sentencing deters people who are selling counterfeit goods and shows them there are serious consequences.”
“Consumers need to be more careful when shopping online. To avoid buying fake products consumers should check reviews, the price of the item (if it’s too good to be true it usually is) and look out for peculiar spelling and grammar,” she advised.
Two other individuals, who were sentenced in relation to this case, received prison sentences on 10th May 2017 and have since been released.