LOUISVILLE, Ky. (BRAIN) — After a four-day trial, Matthew S. Stepp of Shepherdsville, Kentucky, was found guilty Friday of eight counts of mail fraud and three counts of trafficking in counterfeit goods for selling counterfeit high-end bike helmets on eBay.
U.S. Attorney Russell M. Coleman of the Western District of Kentucky announced the conviction. Sentencing is scheduled for September.
"What might appear on its face to be an esoteric white collar prosecution is, in fact, an all-out effort to keep kids and families safe," said Coleman "This office will continue to work with our federal law enforcement partners to protect Americans from counterfeit personal safety equipment and companies from theft of their intellectual property."
Stepp was charged with conducting a scheme to defraud consumers by marketing and selling the helmets between May and November 2014. Prosecutors said Stepp had purchased the counterfeit helmets for pennies on the dollar from Ali Express. Stepp was also charged with three counts of trafficking in counterfeit goods.
Stepp's attorneys had argued that Stepp was unaware that the helmets were fake when he bought them and Stepp had filed suit against Ali Express and its parent, Alibaba, in 2014. That suit was later withdrawn.
During the trial, representatives from Specialized testified that in mid-October 2014 they realized that Stepp was marketing counterfeit Specialized S-Works Prevail helmets. Specialized immediately notified eBay and the National Intellectual Property Rights Coordination Center, who immediately contacted Homeland Security Investigations in Louisville. A search warrant was executed at Stepp's home on Nov. 6, 2014, where 45 counterfeit helmets were seized. Additional packages containing counterfeit helmets that Stepp had placed in the mail for delivery were also seized from the Post Office.
During trial, the United States introduced evidence showing that Stepp purchased counterfeit Specialized S-Works Prevail, Giro Aeon, and Catlike Whisper bicycle helmets on Ali Express for between $50 and $70, and sold those helmets on eBay for $150 and more. The retail value of the helmets was over $200.
Samples of the helmets seized from Stepp were tested to see if they satisfied Consumer Product Safety Commission safety standards.
"The counterfeit helmets were found not to contain roll cages or the internal reinforcements that are standard in high-end authentic Specialized and Giro bicycle helmets. When placed on a head form and dropped onto a testing surface at approximately 11 miles per hour, the counterfeit helmets broke into pieces during impact testing, resulting in direct contact between the head forms and the testing surface," the U.S. Attorneys Office said in a news release.
"Testimony at trial revealed that a consumer wearing one of the counterfeit helmets and suffering a similar impact might suffer a fractured skull, brain damage, or death."
Stepp will be sentenced by U.S. District Court Judge Claria Horn Boom in Louisville on Sept. 10.
