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Justice Department Goes After Trademark Scams

Way back in 2012, I wrote a blog post called What to Expect When You’re Expecting a Trademark Registration: Scams! In that post, I wrote:

People who apply to register trademarks with the United States Patent and Trademark Office tend to receive a variety of mailings from companies purporting to be some sort of official trademark-related entity. These are otherwise known as “scams.”

Sadly, the problem of trademark scams has not gone away. But there is some good news: the U.S. Department of Justice recently announced that two alleged trademark scammers have been indicted. The Justice Department press release states that

Artashes Darbinyan, 36, and Orbel Hakobyan, 41, were charged in a superseding indictment that was unsealed today…

…Darbinyan operated and controlled Trademark Compliance Center (TCC) and Trademark Compliance Office (TCO), which purported to offer trademark registration and monitoring services. The superseding indictment alleges that, through TCC and TCO, Darbinyan sent mass solicitations offering, for a fee, trademark registration and monitoring services to holders of trademarks recently registered with the U.S. Patent and Trademark Office, services which Darbinyan did not intend to, and did not, provide. To accomplish this scheme, Darbinyan used the names of other persons to open accounts for TCC and TCO at “virtual office centers” (i.e., businesses that offered call answering and mail forwarding services) in the Washington, D.C., and Los Angeles areas, and directed employees of the Washington, D.C.-area virtual office centers to forward mail addressed to TCC and TCO – envelopes containing payments from trademark holders – to the virtual office centers in the Los Angeles area, the superseding indictment alleges.

…the defendants perpetrated a bank fraud scheme by passing the mass mailing scam’s proceeds through fake bank accounts, primarily at a Wells Fargo branch in Glendale. According to allegations in the superseding indictment, Darbinyan opened bank accounts using false identities; Hakobyan and Darbinyan deposited the trademark holders’ payments into the Wells Fargo bank accounts and, with the assistance of Wells Fargo bank employees, transferred the funds to other accounts under Darbinyan’s control and either made cash withdrawals or purchased gold with cashier’s checks and wire transfers.

In essence, it appears that Darbinyan and Hakobyan have been charged with bank fraud, rather than a charge directly related to the trademark scams themselves. Presumably, bank fraud is easier to prove.

The excellent trademark blogger Erik Pelton asks some good questions about this matter:

While this is great news for trademark holders, and perhaps it will give pause to some of the others operating scams, I have some questions: How was this case initiated? Has the DoJ investigated other scam outfits? How long was the investigation?

We can hope this case serves as a deterrent to other trademark scammers, but I’ll be surprised if the flood of trademark scams slows down as a result of these two indictments. I encourage the Justice Department to continue to aggressively pursue these unsavory characters.

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