PEREZ CONVICTED IN CIGAR COUNTERFEITING CASE
Altadis U.S.A. Pleased With Latest Outcome
Altadis U.S.A. Investigation is Ongoing


LAURO PEREZ, who was charged in a federal indictment with one count of conspiracy to traffic in counterfeit goods and six counts of trafficking in counterfeit goods, was convicted on all counts on Tuesday, September 15th, by a Miami jury.

The jury rejected Perez’s argument that all he did was innocently copy Cuban products he alleged are being sold worldwide. The jury concluded that, under U.S. law, Perez violated the trademark rights of the U.S. trademark owners, including the trademark rights of Altadis U.S.A. Inc. and its various subsidiaries in the famous MONTECRISTO, ROMEO y JULIETA, and TRINIDAD brands.

For having been found guilty of the conspiracy count, Perez can be sentenced to up to five years of imprisonment. For having been found guilty of the counterfeiting counts, Perez can be sentenced to up to ten years of imprisonment. In addition to incarceration, Perez may be subject to fines, restitution, special assessments, parole terms, or forfeitures that may be applicable. Sentencing will take place on November 23, 2009.

ALTADIS U.S.A. REACTION This case is but one in a series of actions that have taken place as part of an ongoing aggressive campaign by federal, state and local officials to put a halt to cigar counterfeiting. This case will once again send an important message to counterfeiters: counterfeiting will not be tolerated. And it will reconfirm the message that Altadis U.S.A. has been conveying to those who produce, distribute and/or sell so-called “Cuban replica” cigars:

Any unauthorized use of Altadis U.S.A.’s trademarks is illegal. Labeling cigars “Habana” or calling them “Cuban replicas” does not make them legal. Individuals who participate in the manufacture, distribution or sale of “Cuban replica” cigars will be held personally liable for their counterfeiting activities.

“These are important victories for Altadis U.S.A., its distributors and consumers, as well as the entire industry,” said Eric Workman, Senior Vice President Marketing of Altadis U.S.A. “Altadis U.S.A. remains committed to ensuring that Altadis U.S.A.’s trademarks are only associated with the cigars it produces under the high standards of quality for which they are known. In today’s competitive world, protecting brand names and trade designs is critical, particularly those that have established a loyal following like MONTECRISTO and our other famous brands.”

The Perez case is but the latest prosecution resulting from cigar counterfeiting raids that took place in December of 2005. As a result of those raids:
Juan Penton was convicted by a Miami jury and sentenced by a federal judge;
Miguel Guerra pled guilty to two counts of criminal counterfeiting to avoid having to go to trial and in order to get a lighter sentence; and
Lauro Perez has now been found guilty.

Counterfeiters have, for years, believed that they can proceed with their illegal activities. The clear message that has now been sent by the Penton, Guerra and Perez cases is that counterfeiters:
     (i) will be caught by law enforcement agencies;
     (ii) will be indicted by federal grand juries;
     (iii) will be prosecuted by federal prosecutors;
     (iv) will be convicted by South Florida juries; and
     (v) will not just be put on probation, but rather, they will be sentenced to incarceration by federal judges.


NOTICE TO THE TRADE

Altadis U.S.A. is strongly committed to the vigorous enforcement of its trademark rights and will seek criminal prosecution of anyone who would infringe those rights. Altadis U.S.A. continues to work with state and federal law enforcement officials to use anti-counterfeiting laws to secure convictions of counterfeiters of our brands.

If we learn that any importer, distributor, retailer or other member of the Trade is dealing in counterfeit cigars or cigar packaging, we will proceed against the offender aggressively through civil and/or criminal channels. In addition to criminal prosecution, in appropriate cases, we will invoke the civil provision of the federal trademark law that allows courts to award trademark owners like Altadis U.S.A. up to $1 million in statutory (noncompensatory) damages per counterfeited mark, as well as their attorney’s fees. We have been awarded damages and attorney’s fees of $1 million to $2.25 million in such cases.

Altadis U.S.A. also continues to work successfully with U.S. Customs to arrange for the seizure and destruction of shipments of counterfeit cigars and packaging materials. Members of the Trade who have paid for cigars that turn out to be counterfeits and are thus seized by U.S. Customs should be aware that in such circumstances they will find themselves without recourse - counterfeiters do not refund monies nor are they in a position to make good with legitimate product with the quality and prestige of Altadis U.S.A.’s brands.

Altadis U.S.A.’s brands include, among others: Montecristo, H. Upmann, Romeo y Julieta, Trinidad, Don Diego, Santa Damiana, Cabanas, Por Larrañaga, La Corona and Saint Luis Rey.

We caution the trade against engaging in illegal activity in violation of our rights in any of our brands and ask you to inform us immediately if you receive solicitation for products that violate our rights.