GRAND RAPIDS, Mich. (WZZM) – What began as a probe into tobacco tax violations has expanded into a far-reaching investigation of counterfeit clothes sold at 10 Sleeping Tiger Imports stores across Michigan.
Michigan State Police detectives seized more than 6,400 products it says are illegal knockoffs of brands popular with millennials – from Monster Energy T-shirts to Fox Head necklaces.
"They were selling hats, shirts, sweatshirts, necklaces, patches that we know through our training and experience that are not licensed or sanctioned to be sold,'' said Sgt. Karl Schmitz, a detective with the Michigan State Police Tobacco Tax Enforcement Team.
At the center of the investigation is 55-year-old Timothy Roger Szubinski of Walker. State police identify him as the head of
Sleeping Tiger Imports, which has stores in malls in Michigan and Indiana.
Szubinski was arrested Aug. 6 and charged with tobacco products tax violations and delivery of counterfeit products; felonies punishable by up to five years in prison. A probable cause hearing is set for Friday in Grand Rapids District Court.
Szubinski faces similar charges in Kentwood and will likely be charged in Grandville and Walker, Schmitz said.
Bootleg clothing wasn't even on the radar when Michigan State Police launched an investigation last summer into tobacco tax violations. Under Michigan law, businesses must obtain tobacco products from a state-approved wholesaler. The state collects a 32 percent tax on the wholesale price of most tobacco products, including Hookah supplies, before it hits the shelves.
In late June, more than two dozen officers simultaneously hit 10 Sleeping Tiger Imports stores looking for tobacco products from sources other than approved wholesale vendors.
Police collected 4,562 tobacco products – from Hookah Hookah Blackberry to Shisha tobacco 'shots' used in glass smoking pipes.
As Schmitz walked through the stores, he couldn't help but notice display racks with hoodies and sweat shirts bearing the Monster Energy logo. California-based Monster Beverage Corp. only sells licensed merchandise on its supercrosssuperstore.com website, a company spokeswoman said.
"Monster doesn't sell its sweatshirts in party stores or other retail locations, so when we see something like that, we know something is up,'' Schmitz said.
Its West Michigan stores are located at Lakes Mall in Muskegon, Woodland Shopping Center in Kentwood and River Town Crossings Mall in Grandville. Other Michigan stores are in Portage, Battle Creek, Saginaw, Traverse City, Lansing, Bay City and Midland.
"We try to keep it low key, but this one was harder because there were so many items we were taking out,'' Schmitz said of the store raids. "You'd have a clothing rack with 20 or 30 sweatshirts on it and we'd just start taking those sweatshirts, putting them in boxes and hauling them out.''
Items seized include rings, buttons, patches, wooden surfboards, baseball caps, stocking caps, hoodies and more than 600 T-shirts.
Store raids led police to Szubinski's home office on Wilson Avenue SW between O'Brien and Hall streets where they seized several boxes of what Schmitz said were counterfeit goods. But it was the second floor of an old factory on Coldbrook Street NE near Griff's Ice House that yielded the biggest haul.
"It was like walking through any type of warehouse that's floor-to-ceiling with different products,'' Schmitz said. "Many of these are legally obtained and don't seem to have any trademark infringements, but then there'd be rows and rows of blankets, shirts, sweatshirts and surfboards we did seize because of the trademark violations.''
Federal officials estimate counterfeit goods cost the U.S. economy $200 billion annually in lost revenue. Jobs lost to counterfeit goods is about 750,000.
Police are finding fake products such as Nike, Gucci and Timberland shoes, Coach, Christian Dior and Louis Vuitton purses and clothing lines from Burberry, Ralph Lauren and The North Face. These knock-off products are smuggled into the U.S. unregulated, with nearly 80 percent coming from China, according to U.S. Customs officials.
Police agencies last year seized truckloads of knock-off products worth millions of dollars from more than a dozen Michigan cities.
"It's the kind of thing that people haven't been looking at, so it's kind of hidden in plain sight,'' Schmitz said. "People think 'I may want to buy this because it's cheaper,' but really, you're getting what you pay for.''
The bootleg products had a value of more than $61,000.
