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Old 10-20-2006, 01:25 PM
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Post Man in Miami convicted of selling fake Cuban cigars

When Juan Penton took the witness stand this week, he described himself as a Hialeah carpenter who made wooden cigar boxes stamped ''made in Cuba'' to sell as novelty gifts.

But on Friday, a dozen Miami federal jurors found him guilty of selling $3,000 worth of counterfeit cigars in those imitation boxes.

They concluded he was essentially copying famous Cuban cigar trademarks such as Montecristo, which are registered in the United States by its largest cigar producer.

The David-and-Goliath legal tale pitted Penton not only against the U.S. government but also the giant cigar company that funded part of the criminal investigation, Fort Lauderdale-based Altadis U.S.A.

Altadis representatives rejoiced over the verdict -- the first result of three federal prosecutions against five men accused of trafficking in counterfeit Cuban cigars.

''The goal is to send out a message -- don't do this,'' said Altadis' trademark lawyer Jorge Espinosa, of the law firm Kluger Peretz. ``It's not just damaging to our product; it's misleading the consumer.''

Penton, 43, who faces sentencing on Dec. 22, remains free on bond -- though prosecutors asked U.S. District Judge Federico Moreno to detain him in the meantime.

''Where do you think he's going to go -- Cuba?'' Moreno asked assistant U.S. Attorney Michael Gilfarb, noting that Penton's son was a Marine who is going to be shipped off to Iraq any day.

The judge allowed Penton, a U.S. resident who now works as a truck driver, to travel only in Florida south of Orlando.

Penton, who came from Cuba on a raft 11 years ago, expressed disappointment about the guilty verdict. His attorney, Jose ''Pepe'' Herrera, plans to appeal and ask Moreno for a new trial. He said the verdict is a violation of the Helms-Burton law -- Congress' version of the U.S. trade embargo against Cuba -- because it implicitly protects Cuban trademarks.

Penton, found guilty on three counterfeiting offenses, faces a sentence ranging from probation to 18 months in prison because of the small amount of the counterfeit sale. Moreno had dismissed three other counterfeiting charges on Thursday.

POLITICAL OVERTONES

Friday's closing arguments touched on everything -- from counterfeit Cuban cigars to the U.S. embargo against the Castro government.

Herrera lashed out at Altadis for manipulating the Miami-Dade police investigation of his client, which included an undercover buy of 60 wooden boxes of Dominican Republic-made cigars -- though the boxes said ''made in Cuba.'' Altadis gave police the $3,000 for that purchase.

Herrera argued that Penton was simply copying the famous Cuban cigar boxes that he recalled while growing up on the island nation -- not Altadis' U.S. versions.

''These are replicas,'' he said, stressing again and again that Penton was imitating authentic packaging materials for such famous Cuban cigar brands as Romeo Y Julieta.

He argued that the trademarks for those brands cannot be protected in the United States because of the nation's trade embargo against Cuba.

But Gilfarb challenged him.

''This has nothing to do with Cuba,'' he told the jurors. ``We don't have to worry about Cuba because of the embargo. What we have to worry about are people like the defendant.''

Gilfarb said the fact that Penton counterfeited only Cuban cigars ''misses the point'' because to do that ``he has to use the [Altadis] marks registered with the U.S. Patent and Trademark office.''

EXCLUSIVE LICENSE

Altadis claims it holds the exclusive license for the U.S. trademarks for the premium Cuban cigar brands Montecristo, H. Upmann, Por Larranaga, Romeo y Julieta, Saint Luis Rey and Trinidad.

Altadis holds those rights because in the late 1990s, it acquired them from Cuba's exiled cigar-producing families whose companies were nationalized after the 1959 Cuban Revolution. Altadis' predecessor company had been making cigars under those brands in joint ventures with those families since the mid-1970s.

Its parent company, Altadis S.A., based in Spain, now controls half the Castro government's cigar entity, Habanos S.A.

Altadis says it avoids any violation of the U.S. trade embargo by selling Cuban-made cigars in Europe and by using the Fort Lauderdale subsidiary to sell Dominican Republic-made cigars in the United States.

In a sworn statement, Altadis U.S.A. marketing vice president Eric Workman said the wholesale price of its ''genuine'' Dominican-made Montecristo and Romeo y Julieta cigars -- the two most widely counterfeited brands -- is $75 to $125 per box. The average retail price per box is $125 to $250, he said.

Workman estimated that a Miami-Dade counterfeiter of 1,000 boxes deprives Altadis U.S.A. of $150,000 to $200,000 in sales.

''This is not about small dollars,'' said Altadis' trademark lawyer, Espinosa. This is big dollars.''
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