Nick Chen, a Vietnamese National legally residing in Houston, has been arrested on charges of conspiracy and trafficking in counterfeit goods, announced U.S. Attorney Kenneth Magidson.
Chen, 46, was charged in a four-count sealed indictment returned Oct. 8, which was unsealed this morning as he made his initial appearance before U.S. Magistrate Judge Mary Milloy. He will make his next appearance on Wednesday, Oct. 15, at 10 a.m.
Beats Electronics was originally founded in 2006 by rapper and hip hop mogul Andre Young aka Dr. Dre and music producer Jimmy Iovine, according to the indictment. Beats Electronics was acquired by Apple Inc. in August 2014. Tours, urBeats, iBeats and Powerbeats by Dr. Dre are premium lines of earbud headphones manufactured by Beats Electronics who holds the registration for the trademarks for Beats, including its iconic logo with the U.S. Patent and Trademark Office and stylized variations from many countries around the world. The retail price of each Beats product ranges between $99.95 and $599.95.
The indictment alleges Chen was the CEO of NPC Enterprises and that he allegedly conspired to traffic in counterfeit Beats products from June 2013 through Feb. 2014. Chen would allegedly import counterfeit Beats products from China and Honk Kong to numerous addresses in the Houston area. The indictment alleges he then took them to a location on Afton street which he used as his warehouse and distributing center.
The total value of counterfeit products alleged in the indictment exceeds $560,000.
If convicted, Chen faces up to 10 years in federal prison and a possible $2 million fine.
The charges are the result of an investigation conducted by Homeland Security Investigations. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.