United States District Court, S.D. New York
December 12, 2005.
UNITED STATES OF AMERICA,
MOHAMMED DARWICHE, Defendant.
The opinion of the court was delivered by: ROBERT SWEET, District Judge
Defendant Mohammed Darwiche ("Darwiche") has pleaded guilty to
trafficking in counterfeit goods in violation of
18 U.S.C. § 2320, a Class C felony. Darwiche is hereby sentenced to a term of
imprisonment of 366 days. Two years supervised release is also
Darwiche was arrested on January 22, 2004 and released on that
same day on a personal recognizance bond in the amount of
$100,000. On August 18, 2004, an indictment was filed in the
Southern District of New York, charging that from at least March
2003 through January 2004, in the Southern District of New York,
Darwiche trafficked in handbags and other consumer leather goods,
as well as tags for such goods, bearing counterfeit trademarked
designs that he manufactured, in violation of 18 U.S.C. § 2320. On May 26, 2005, Darwiche appeared before the Honorable Frank
Maas in the Southern District of New York and allocuted to his
criminal conduct as charged. The defendant's sentencing has been
scheduled for December 12, 2005.
The Sentencing Framework
In accordance with the Supreme Court's decision in United
States v. Booker, 125 S. Ct. 738 (2005) and the Second Circuit's
decision in United States v. Crosby, 397 F.3d 103 (2d Cir.
2005), the sentence to be imposed was reached through
consideration of all of the factors identified in
18 U.S.C. § 3553 (a), including the advisory Sentencing Guidelines (the
"Guidelines") establishing by the United States Sentencing
Commission. Thus, the sentence to be imposed here is the result
of a consideration of:
(1) the nature and circumstances of the offense and
the history and characteristics of the defendant;
(2) the need for the sentence imposed
(A) to reflect the seriousness of the offense, to
promote respect for the law, and to provide just
punishment for the offense;
(B) to afford adequate deterrence to criminal
(C) to protect the public from further crimes of the
(D) to provide the defendant with needed educational
or vocational training, medical care, or other
correctional treatment in the most effective manner; (3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range
(A) the applicable category of offense committed by
the applicable category of defendant as set forth in
the guidelines . . .;
(5) any pertinent policy statement . . . [issued by
the Sentencing Commission];
(6) the need to avoid unwarranted sentence
disparities among defendants with similar records who
have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of
18 U.S.C. § 3553 (a). A sentencing judge is permitted to find all
the facts appropriate for determining a sentence, whether that
sentence is a so-called Guidelines sentence or not. See
Crosby, 397 F.3d at 111.
Darwiche was reportedly born on August 25, 1955, in Marwania,
Lebanon, to the marital union of Ali Ahmed Darwiche, deceased,
and Safieh Darwiche, nee Wazni, age 81. The defendant's father
died of a heart attack at the age of 63 in 1986, and previously
worked as a merchant. Darwiche's mother is a homemaker who
resides in Lebanon, and presently suffers from diabetes, high
blood pressure, and a fractured leg. The defendant described a
happy childhood, during which he experienced close relationships with his parents and siblings.
Darwiche informed that he immigrated to the U.S. by virtue of a
tourist visa in 1977, and obtained his residency in approximately
1983. According to the Bureau of Citizenship and Immigration
Services (BCIS), the defendant officially entered the U.S. on
March 3, 1982, and is legally residing in the U.S. as a permanent
resident. Darwiche is amenable to removal proceedings due to his
conviction in the instant offense.
The defendant is married to Rajaa Darwiche, nee Karout, age 40.
Darwiche informed that he met his wife upon returning to Lebanon
in 1986, following his father's death and that she was reared in
the same community. The defendant stated that he applied for his
wife to come to the U.S. in 1987, by virtue of a tourist visa and
that she subsequently became a permanent resident in
approximately 1988. Darwiche related that his wife is the legal
owner of their 99-cent store business and that on occasion, she
works in the store. The defendant stated that with the exception
of suffering from high blood pressure, his wife is otherwise
The defendant reported the following eight children by virtue
of his marital union, all of whom reside with him and his wife,
and are well-adjusted and healthy: Diana, age 17; Stephanie, age
15; Amanda, age 13; Kassim, age 9; Lina, age 7; Lama, age 6; Hussein, age 3; and Reem, age 16 months.
From 2000 to December 2004, the defendant and his family
resided in a private house located at 75 Terrace Avenue, Jersey
City, NJ. The home was purchased by Darwiche on November 3, 2000,
for $280,000, and ultimately sold on August 25, 2004, for
$575,000. Darwiche stated that the property had been transferred
under his wife's name following a re-finance prior to its sale,
and that the money was used to purchase their new home, as well
as to open their current business.
Since December 2004, Darwiche and his family have been living
in a private, two-family house located at 121 Terrace Avenue,
Jersey City, NJ. The residence was purchased on October 21, 2004,
for $510,000, and is in the name of Darwiche's wife. Darwiche and
his family occupy the basement, first floor and second floor of
the home, while the third floor is rented to tenants for $1,800
per month. On January 27, 2005, a conventional 30-year mortgage
was secured on the property through First National Bank, located
in Scottsdale, AZ, in the amount of $408,000. The monthly
mortgage payment is $2,990.44.
Darwiche related that his wife and three older daughters are
aware of the charges against him and have been emotionally
supportive. The defendant informed that his family members remain
somber and are concerned about the outcome of his case.
Darwiche reported no history of mental or emotional problems,
and has never been treated for such problems.
The defendant disclaimed the use of drugs or alcohol. A
urinalysis conducted at the conclusion of the pre-sentence
interview tested negative for illicit substance abuse.
The defendant informed that he completed five years of
elementary school and one year of intermediate school at the
Amarwania Public School, located in Lebanon, equating it to the
U.S. equivalent of a sixth grade education. Darwiche explained
that he quit school at the age of 13 in 1968, in order to work
and help his parents financially support their family.
Darwiche stated that upon immigrating to the U.S. in 1977, he
attempted to learn English over a one-year period through courses
at Hunter College and New York University (NYU), both of which
are located in New York, NY, as well as Brooklyn College Academy,
located in Brooklyn, NY. Darwiche informed that although he can
speak and read English minimally, he cannot write in this
Since February 2005, the defendant has been employed as the de
facto owner of A99-Cent Paradise, located at 3495 Kennedy Boulevard, Jersey City, NJ. Darwiche informed that the business
is legally in his wife's name at her insistence, but that he runs
the day-to-day operation with the assistance of various family
members. The defendant stated that he works full-time, seven days
per week, and that all of his earnings, which amount to
approximately $365.13 per week, are used for various household
expenses. Additionally, Darwiche's wife earns $257.93 per week.
The business was reportedly established with a portion of the
funds from the sale of the defendant's prior home.
From 1998 to 2004, the defendant owned and operated a business
under the name ADiana Handbags, Inc. until 2001; and AK&H
Designs, Inc. until 2004; which profited from the sale of leather
handbags. Darwiche related that he employed between two and four
employees at any given time, and produced merchandise according
to demand. The defendant informed that he was also involved in
the production of handbags. The defendant stated that he earned
approximately $500 per week before the business closed as a
result of his involvement in the instant offense and subsequent
According to the pre-sentence investigation report, Darwiche
has a net worth of approximately $318,686.85. His family's total
monthly income amounts to $4,992.24. His family's monthly
expenses amount to $5,737.44. The Offense Conduct
The investigation of the instant offense was conducted by a
special agent of the former U.S. Customs Service, now known as
Immigration and Customs Enforcement. The agent was investigating
individuals suspected of engaging in trafficking in counterfeit
trademark merchandise and during the course of her investigation,
had frequent discussions with a confidential informant ("CI-1").
CI-1 informed the agent the Darwiche manufactured and
distributed counterfeit trademark merchandise, specifically
counterfeit Coach, Inc. merchandise, at 208 West 29th Street,
Room #211, New York, NY. The premises consisted of office space
in a five-story, red brick building and included an adjacent
storage room. CI-1 identified Darwiche as the person in charge of
The agent subsequently obtained business records which
confirmed that businesses known as ADiana Handbags, Inc., and
AK&H Designs, Inc. had operated with a listed address of 208 West
29th Street, New York, NY. According to the records, ADiana
Handbags, Inc. was owned and operated by Darwiche. CI-1 stated
that Darwiche closed down his business for a short period of time
and when it re-opened, the name had changed from ADiana Handbags,
Inc. to AK&H Designs, Inc. On March 28, 2003, the agent visited the building located at
208 West 29th Street, New York, NY, and went to the second floor.
The mailman confirmed that ADiana Handbags, Inc., was located at
the end of the hallway in Room #211. From the hallway on the
second floor, the agent observed the outside door to the premises
with the number A211 on it. The agent stood outside the door and
heard sewing machines from behind the door.
On May 9, 2003, CI-1 informed the agent that Darwiche had
closed down his operations for a short time.
On June 4, 2003, CI-1 informed the agent that Darwiche had
resumed business at the premises under the name AK&H Designs,
Inc. On June 25, 2003, and August 11, 2003, CI-1 advised the
agent that Darwiche had expanded his operation and was now using
an adjacent room, accessed through Room #211, to store his
finished product of counterfeit handbags.
On October 9, 2003, an undercover agent ("UC-1") went to the
premises and met with an individual identified as Darwiche. At
that time, UC-1 purchased 31 counterfeit Coach handbags and one
counterfeit Coach wallet for approximately $600 from Darwiche.
Darwiche also provided UC-1 with corresponding counterfeit tags
for this merchandise.
The agent later provided the 31 handbags and the wallet that had been purchased by UC-1, to a representative of a company
that specialized in intellectual property investigation and that
was authorized to investigate counterfeit trademark violations on
behalf of Coach. The investigator determined that all of the
items were fake and not produced by Coach, or any of its
affiliates, licensees, or agents.
On October 30, 2003, the agent received a letter from a
representative of Coach, Inc., who confirmed that Room #211 of
208 West 29th Street, New York, NY, was not an authorized retail
location for Coach products.
From November 7, 2003, through November 21, 2003, UC-1 spoke to
Darwiche by telephone on numerous occasions to discuss a larger
purchase. UC-1 used the telephone number given to UC-1 by
Darwiche at the time of UC-1's first purchase. The voicemail for
this telephone number identified it as belonging to Darwiche.
UC-1 ultimately placed an order for approximately $5,000 worth of
merchandise, allegedly for a store in Texas. During these
telephone calls, Darwiche indicated to UC-1 what the actual price
of particular items of merchandise would be if they had been
purchased from Coach legitimately.
On November 21, 2003, the counterfeit Coach merchandise was
received in Texas by federal agents. On November 24, 2003, the
counterfeit items were forwarded from Texas to the case agent in New York. The case agent later provided the items purchased by
UC-1 from Darwiche at the premises for approximately $5,000, to
the Coach investigator who determined that all of the items were
fake and not produced by Coach, or any of its affiliates,
licensees, or agents.
On January 7, 2004, CI-1 visited the premises and observed
large amounts of counterfeit Coach merchandise in the storage
room attached to Room #211. A few days later, on January 13,
2004, CI-1 again visited Room #211 of the premises and observed
continued production of counterfeit Coach products.
Darwiche was arrested by federal authorities on January 22,
2004, following an executed search warrant.
According to the Government, the value of the infringing Coach
items counterfeited by Darwiche is approximately $50,000;
however, the parties have stipulated that the total loss
attributable to Darwiche is no more than approximately $22,810.
Relevant Statutory Provisions
The maximum term of imprisonment that may be imposed is ten
years. See 18 U.S.C. § 2320. If a term of imprisonment is
imposed, the Court may impose a term of supervised release of not
more than three years. See 18 U.S.C. § 3583 (b) (2). The defendant is eligible for not less than one nor more than
five years' probation pursuant to 18 U.S.C. § 3561 (c) (1).
Because the offense is a felony, one of the following must be
imposed as a condition of probation, unless extraordinary
circumstances exist: a fine, restitution, or community service.
See 18 U.S.C. § 3563 (a) (2).
The maximum fine that may be imposed is $2 million, pursuant to
18 U.S.C. § 3571. A special assessment in the amount of $100 is
mandatory. See 18 U.S.C. § 3013.
Full restitution to the victims is required under
18 U.S.C. §§ 3663A and 3664. Restitution in the amount of no more than $22,810
is owed to Coach Inc.
The November 1, 2004 edition of the United States Sentencing
Commission Guidelines Manual ("the Guidelines") has been used in
this case for calculation purposes, in accordance with U.S.S.G. §
1B1.11 (b) (1).
The guideline for a violation of 18 U.S.C. § 2320 is found in
U.S.S.G. § 2B5.3, which provides for a base offense level of
eight. See U.S.S.G. § 2B5.3 (a). Because the total loss attributable to the defendant with
respect to the counterfeit merchandise amounted to no more than
approximately $22,810, the offense level is increased by four
levels. See U.S.C.G. §§ 2B5.3 (b) (1) (B) and 2B1.1 (b) (1)
Because the offense involved the manufacture and importation of
infringing items, the offense level is increased by two levels.
See U.S.S.G. §§ 2B5.3 (b) (2).
Darwiche has shown recognition of responsibility for his
offense. Therefore his offense level is reduced two levels. See
U.S.S.G. § 3E1.1 (a).
The defendant's resulting adjusted offense level is twelve.
Darwiche was arrested on December 14, 1992 for committing
insurance fraud in the second degree. He pled guilty to the
offense on June 4, 1993. This criminal conviction results in a
subtotal criminal history score of three.
According to the sentencing table at Chapter 5, Part A, a total
of three criminal history points places the defendant in a
Criminal History Category of II. Sentencing Options
Based on a total offense level of twelve and a Criminal History
Category of II, the Guidelines range of imprisonment is twelve to
The guideline range for a term of supervised release is at
least two years but not more than three years. See U.S.S.G. §
5D1.2 (a) (2). If a sentence of imprisonment of one year or less
is imposed, a term of supervised release is not required, but is
optional. See U.S.S.G. § 5D1.1 (b). Supervised release is
required if the Court imposes a terms of imprisonment of more
than one year or when required by statute. See U.S.S.G. § 5D1.1
Because the applicable guideline range is in Zone D of the
Sentencing Table, Darwiche is not eligible for probation,
pursuant to U.S.S.G. § 5B1.1, application note #2.
The fine range for the instant offense is from $3,000 to $2
million. See U.S.S.G. § 5E1.2 (c) (3) (A) and (c) (4).
Pursuant to U.S.S.G. § 5E1.1 (a) (1), in a case with an
identifiable victim, the Court shall enter a restitution order
for the full amount of the victim's loss if such order is authorized under 18 U.S.C. § 3663A.
The Remaining Factors of Section 3553 (a)
Having considered the Guidelines calculations, as set forth
above, this Court also gives due consideration to the remaining
factors identified in 18 U.S.C. § 3553 (a). Pursuant to all of
the factors, it is hereby determined that a guideline sentence is
An offense level of twelve and a Criminal History Category of
II results in a Guidelines range of twelve to eighteen months.
Accordingly, a term of 366 days is hereby imposed.
Darwiche is also hereby sentenced to two years supervised
release. Darwiche shall report to the nearest Probation Office
within 72 hours of release from custody, and supervision will be
in the district of his residence.
As mandatory conditions of supervised release, Darwiche shall:
(1) not commit another federal, state, or local crime; (2) not
illegally possess a controlled substance; (3) not possess a firearm or destructive device; and (4) cooperate in the
collection of DNA as directed by the probation officer.
Darwiche shall comply with the standard conditions of
supervision and shall also comply with the following special
conditions: (1) he shall provide the probation officer with
access to any requested financial information; (2) he shall not
incur new credit charges or open additional lines of credit
without the approval of the probation officer unless he is in
compliance with the installment payment schedule; and (3) he
shall submit his person, residence, place of business, vehicle or
any other premises under his control to a search on the basis
that the probation officer has reasonable belief that contraband
or evidence of a violation of the conditions of release may be
found, which search must be conducted within a reasonable time
and in a reasonable manner.
The defendant shall make restitution payable the Clerk, U.S.
District Court, for disbursement to Coach Inc., in an amount of
not more than $22,810.
If the defendant is engaged in a BOP non-UNICOR work program,
the defendant shall pay $25 per quarter toward the criminal
financial penalties. However, if the defendant participates in
the BOP's UNICOR program as a grade 1 through 4, the defendant
shall pay 50% of his monthly UNICOR earnings toward the criminal financial penalties, consistent with BOP regulations
at 28 C.F.R. 545.11.
The balance of the restitution shall be paid in monthly
installments of 20 percent of gross monthly income over a period
of supervision to commence 30 days after the date of the judgment
or the release from custod.
The factors in 18 USC 3664 (f) (2) were considered in
formulating the payment schedule.
Darwiche shall also pay to the United States a special
assessment in the amount of $100, which shall be due immediately.
Due to the imposition of restitution, the fine in this case is
It is so ordered.
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