By Joe
Salimando
A
December guilty plea (with sentencing to come in April 2012) was a major
victory for Schneider Electric against a counterfeiter that it has pursued
since at least 2009, according to tedmag.com reporting.
Along
the way, the case apparently involves a defendant named in a 2009 legal action
– the man who pled guilty recently. There’s more depth and breadth, as outlined
in full (as we now understand it) below.
From the
Jan/Feb 2012 issue of Electroscan, the newsletter of the Fort
Worth/Tarrant County (TX) chapter of the Independent Electrical Contractors:
“An
Austin business owner pleaded guilty in December in federal court to
trafficking more than $4.7 million in counterfeit electronics.
“Eldon
Tamas ‘Nick’ Toldy, 62, owner of Pioneer Breaker and Control Supply and Nick’s
Sales, also pleaded guilty to mail fraud in connection with a scheme to sell
counterfeit circuit breakers, according to a release from the U.S. Immigration
and Customs Enforcement. He is set to be sentenced in April.
“From
late 2008 to April 2010, Toldy traveled to China with U.S. made circuit
breakers and met with Chinese manufacturers to produce breakers with
counterfeit trademark names…Toldy brought the breakers to the U.S. relabeled
them and sold them through his companies.
That
item alerted tedmag.com to do a little catch-up research. For those who like it
short, there is a six-paragraph item posted to the site of U.S.
Immigration and Customers Enforcement. It includes this.
"This
individual, motivated only by greed, has allowed these potentially dangerous
counterfeit circuit breakers to be bought and used in homes and businesses
around the country.
“These
items, which have not been properly manufactured or tested, could lead to
costly repairs, property damage, and even serious injury or death," said
Susan McCormick, special agent in charge of the ICE HSI office overseeing
Jacksonville.”
Notes:
1.
HIS—Homeland Security Investigations
2.
According to the item, ICE HSI’s raid on the Pioneer warehouse in Austin took
place on April 21, 2010—meaning it took more than 16 months from seizure of
evidence to a conviction. Of course, it no doubt took longer to take in the
initial information on Pioneer and make the internal argument for a raid.
Back to 2009…
In
further research, tedmag.com discovered a Dec. 17, 2009, court decision (U.S.
District Court for the Western District of Texas, Austin Division).
Download a 25-page PDF of the decision. It’s the
judge’s order in the case of Square D Company v. Pioneer Breaker &
Control Supply, Co. et al. Sound familiar?
That
action saw Schneider’s Square D Co. sue Defendants
- Pioneer
Breaker and Control Supply, Corp. (“Pioneer Breaker”),
- Tamas Toldy
(“Toldy”),
- Gordon E. Vaught
d/b/a ABN Direct (“Vaught”),
- Surtidora
Electrica del Norte SA DE C.V. (“Surtidora”), and
- Humberto
Gonzalez d/b/a HESCO (“Gonzalez”)
“…for
the sale of counterfeit goods in violation of the Lanham Act, 15 U.S.C. § 1114,
which prohibits trademark infringement, and § 1125(a), which prohibits false
designation of origin.”
In
his opinion, Judge Sam Sparks included this paragraph which, he wrote, was not
arguable:
“…it
is undisputed Toldy, on behalf of Pioneer Breaker, acquired 54,400 Square D breakers
from Vaught and sold them to Breakers Unlimited. Of these, Breakers Unlimited
retained approximately 30,981 of them. These retained breakers were tested by
Plaintiff’s expert, Mr. Rezac, and he has concluded they contain numerous
counterfeit characteristics, and are not authentic breakers.
“He
also supervised and observed the testing of a sampling of these breakers under
UL489’s testing standards, and found they did not comply with even basic
testing standards…Plaintiff has presented undisputed evidence at least 30,981
of the breakers sold by Pioneer Breaker to Breakers Unlimited are not authentic
breakers and bear counterfeit versions of Plaintiff’s trademarks.”
That’s
from page 19 of the PDF. On page 22:
“As
for the trademark infringement claims, Pioneer Breaker and Toldy claim summary
judgment must be granted for those infringement claims that are based on the
first four shipments of QO® 2020 breakers to Breakers Unlimited in 2005. As has
been stated numerous times in this order, it is undisputed Toldy (on behalf of
Pioneer Breaker) acquired 20,800 QO® 2020 breakers from Vaught in 2005 in four
shipments, and resold all those breakers to Breakers Unlimited in Indiana.
“Breakers
Unlimited in turn resold all 20,800 breakers from those first four shipments to
its customers. Apparently, none of them were returned or complained about.
“Some
months after the first four shipments, Pioneer Breaker and Toldy acquired
33,600 more QO 2020 breakers from Vaught, and again sold them to Breakers
Unlimited (for a total of 54,400 breakers). The breakers that were tested by
Plaintiff’s expert and found to be counterfeit come from this fifth shipment,
part of which was retained by Breakers Unlimited.”
There
is more, of course, in that 2009 decision.
ADDITIONAL
NOTE: For background info on Schneider’s case against Breakers Unlimited,
decided (in Schneider’s favor) by a jury in mid-2009, see this report on CounterfeitsCanKill.com.
Read
paragraph three, which specifically names Pioneer Breaker and Control Supply of
Austin as the suppliers to Breakers Unlimited of the counterfeit items.
To put a counterfeiter down—the timeline
If
one puts the facts amassed here together, it would appear that:
- In 2005,
Pioneer Breaker may have done something illegal.
- Sometime
thereafter, Schneider Electric/Square D Co. caught a whiff of that.
- In 2007,
Schneider Electric filed suit against Breakers Unlimited.
- In mid-2009,
a jury found Breakers Unlimited “guilty of purchasing and selling counterfeit
circuit breakers.”
- In late 2009,
Judge Sam Sparks issued the decision linked and quoted above.
- In April
2010, federal authorities raided a Pioneer Breaker warehouse.
- In early
December 2011, Toldy of Pioneer pled guilty.
- In April
2012, he’ll be sentenced.
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