Feds Bust Three For Trafficking Fake Car Parts
Federal agents raided a Long Island City warehouse, where they arrested three men last week on charges of selling counterfeit brake pads and other auto parts to repair shops – many of which service the city’s yellow taxicabs and licensed livery cabs, authorities said.
Shashi Malhotra and Fadi Kilani, of Paterson, New Jersey and Richard Dininni, of Easton, Pennsylvania, were charged with conspiracy to traffic in counterfeit goods in two indictments unsealed on February 19, U.S. Attorney Preet Bharara and FBI authorities said in a joint press release. The indictments also allege that Malhotra imported, and attempted to import, parts from China and other countries in July 2012, while Kilani exported, and attempted to export parts to Saudi Arabia and other regions overseas in November 2012. Malhotra and Kilani also allegedly discussed by phone, in October 2012, the sale of counterfeit Ford Motorcraft tie rods, according to the indictments.
Agents from the Federal Bureau of Investigation (FBI) raided several locations on February 19, including E&Y Distributors, a major supplier of taxi parts, located at 35th Avenue and Vernon Boulevard in Long Island City.
Malhotra, Kilani and Dininni were arrested at their homes in New Jersey and Pennsylvania. No one from E&F Distributors was arrested in the sting, an FBI spokesperson said. Law enforcement sources said employees at the warehouse are cooperating with federal investigators. “Some of the employees said, ‘We know what’s been going on and we’ll tell you whatever you want to know.’”
Bharara described the counterfeit parts as “automobile replacement parts equivalent to designer knockoffs”, and suggested that the quality of the parts “may have been no different from many other generic parts sold every day”.
Officials said thousands of yellow cabs and livery cars were outfitted with the knockoff parts – including brake pads, suspension springs and antilock braking sensors that were sold by the counterfeit ring. The items were packaged to resemble authentic parts manufactured by Ford, General Motors and Federal-Mogul, which contracts with automobile manufacturers to produce parts.
Law enforcement sources said there could be “thousands of taxis tooling around the city” with the shoddy, counterfeit parts. “These parts have been installed in taxis and liveries that are on the street as we speak.”
Officials said auto parts typically undergo a stringent inspection process, but it is unclear what, if any, safety measures were used on the counterfeit parts.
City officials said the public has no reason to be concerned.
“The public may remain confident in the safety of New York City taxicabs,” Taxi & Limousine Commissioner David Yassky said. Yassky, who oversees the agency that regulates the city’s more than 13,000 yellow cabs, said taxis are required to undergo “frequent and exhaustive inspections” three times each year. Any defective or malfunctioning parts would most likely turn up in those inspections.
“We congratulate the FBI and the U.S. Attorney’s office on this investigation and today’s operation, which effectively put this distribution network out of business,” Yassky said in a prepared statement.
Malhotra and Kilani each operated separate auto repair shops in Paterson, an FBI spokesperson said. Dininni owned an auto repair shop in Easton. From October 2011 through February 2013 the three defendants allegedly sold and conspired to sell generic automotive parts doctored to look like original parts manufactured by major brands, the feds said.
“While their replacement parts may have been no different from many other generic parts sold every day in the aftermarket, they were able to command the same higher prices charged by the automobile manufacturers whose names they stole,” Bharara said.
The February 19 sting concluded a three-year investigation into the counterfeit ring conducted by the FBI.