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5-Hour Energy Counterfeiter Gets 7 Years in Federal Prison.

Byline: Amanda Ciccatelli

Last week, Walid "Wally" Jamil, 57, one of the primary defendants in the very first U.S. criminal prosecution from a food/beverage counterfeiting operation, was sentenced to seven years in prison and an additional three years of supervised release.

In addition to the $10 million civil judgment against him, he was ordered to pay $555,801.32 in criminal restitution to Living Essentials, makers of 5-Hour ENERGY. Jamil was a key part of a counterfeiting ring that produced millions of bottles of counterfeit 5-Hour ENERGY drink in a San Diego factory before the scheme was broken up by investigators in 2012.

Geoffrey Potter, lead counsel to Living Essentials in this matter and head of the Anti-Counterfeiting practice at Patterson Belknap, sat down with Inside Counsel to discuss this case. Potter led the investigation that resulted in the arrest of the defendants and the dismantling of the counterfeiting ring.

"I am particularly gratified that the Court gave Wally Jamil such a long prison sentence. I am gratified not only as 5-hour ENERGY's lawyer, but also as a consumer and as a parent," he told us. "All counterfeiting is theft, but counterfeiting something that we eat is an especially horrific crime. I want those in the future that might consider foisting these types of counterfeits on Americans to know that the penalty will be very harsh."

Jamil was a key conspirator in a criminal scheme to counterfeit millions of bottles of the popular energy supplement, 5-Hour ENERGY. The counterfeit bottles and labels were exact replicas of the authentic 5-Hour ENERGY packaging, but the liquid inside was a home brew mixed in an unlicensed San Diego factory, according to Potter.

"The counterfeits were consumed by hundreds of thousands of people, which merited a long prison term for this first-time offender. It is anticipated that some of his co-conspirators will be sentenced to even longer terms of incarceration," he explained. "When other prosecutors see the important result achieved in this prosecution, perhaps they will bring more cases against counterfeiters"

Potter's hope is that this lengthy prison sentence will serve as a deterrent for future would-be food or beverage counterfeiters -- hopefully saving the public from future harm. Any counterfeiting is theft, but counterfeiting a consumable product is an even worse crime because it could lead to consumers ingesting an unsafe product.

"Fortunately, in the case of 5-Hour ENERGY, we could move quickly to take the counterfeits off the market in 2012 and today, only authentic 5-hour ENERGY is now available in stores," said Potter.

So, why has counterfeit crime gotten so out of hand? Unfortunately, technology and global trade has made producing counterfeits easier than ever before. Now, any person, even with limited capital or ingenuity can have a counterfeit of virtually anything produced and distributed.

Fortunately, there are things that companies and consumers can do to protect themselves from counterfeit crimes in the food industry. According to Potter, brand owners need to monitor the sale of their products to consumers, so that they can quickly detect counterfeits and then move aggressively against the counterfeiters to quickly shut them down.

He said, "You would be amazed how many manufacturers know everything about their product when it is in the factory, but know very little about what is on store shelves. We are often asked by clients to help them set up programs to guard against counterfeit and diverted products."

Further reading: E-commerce Giant Alibaba Accused Companies of Filing False Counterfeiting Complaints How UGG's Legal Team Is Using Social Media to Fight Counterfeits Makers of Bogus 5-Hour Energy Drinks Convicted in First-of-Its-Kind Case

5-Hour Energy wins $20M in counterfeiting lawsuit
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Publication:Inside Counsel Breaking News
Date:May 4, 2017
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