A Cave City man admitted Wednesday in federal court to selling counterfeit merchandise as legitimate designer-brand goods and underreporting his income on tax returns.
Yan Chen, 68, pleaded guilty in U.S. District Court in Bowling Green to two counts of trafficking in counterfeit goods and three counts of aiding/assisting in preparing false returns to the IRS.
Chen was accused of selling off-brand clothing, technology, perfume, watches, wallets and other items in 2016 at Flea Land in Bowling Green and at Retail and Wholesale Market in Cave City purporting to be from brands such as Apple, Burberry, Michael Kors, Nike, Louis Vuitton, Gucci, Fendi, Under Armour, Dolce and Gabbana, North Face and other well-known labels.
The counterfeiting caused an intended loss of about $2.3 million, according to a plea agreement filed in federal court.
“I made a mistake, and I’m willing to accept what I did,” Chen said in court through an interpreter.
Chen also admitted preparing tax returns for the years 2013-15 that underreported his business income and gross receipts for each year.
Federal prosecutors determined Chen owed $272,726 in back taxes.
As part of a plea agreement, Chen will have to pay at least $50,000 in back taxes by Feb. 11, when he is expected to be sentenced by U.S. Chief District Judge Greg Stivers.
Chen will also have to forfeit a 2011 Toyota Sienna and his ownership stake in property on South Dixie Highway in Cave City where Chen registered his business.
Federal prosecutors are seeking an unspecified term of imprisonment for Chen, asking that he be sentenced to the low end of a period of time determined by federal sentencing guidelines, which take into account the type of crimes charged against a person and that person’s prior criminal history.