Altadis USA, the largest manufacturer and marketer of cigars in the world, notches two important victories in its ongoing efforts to halt cigar counterfeiting: a guilty verdict and sentencing for Juan Penton and a guilty plea by Miguel Guerra.

It seems that counterfeiters have long believed that state law leniency (in states such as Florida, for example) could enable them to proceed unchecked with their illegal activities and, if caught, avoid civil liability through sham companies and forego any real criminal sanctions. Not any more. Cigar brand Altadis USA recently notched two important legal victories.

Juan Penton, charged with counterfeiting by federal prosecutors and convicted by a Miami jury, was sentenced this month by a federal trial court judge to five months of house arrest, followed by five years of probation, and a $7,500 fine.

Although thousands of empty cigar boxes were found in Penton's possession at the time of his arrest, the trial judge, taking into consideration the law in effect at the time of the arrest, could only sentence Penton based on the 60 full boxes of counterfeit cigars that Miami Dade Police Department had caught him selling for $3,000.*

The sentence – five months' house arrest followed by five years probation – plus the trial judge's comments in open court – sent a significant message to those who ignore the anti-counterfeiting statute and engage in counterfeiting with impunity. The clear message sent to counterfeiters by the Penton case is that they will be: caught by law enforcement agencies; indicted by federal grand juries; prosecuted by federal prosecutors; convicted by juries (even in South Florida); and will not just be put on probation, but sentenced to incarceration by federal judges.

Miguel Guerra, arrested at the same time as Penton and scheduled to go to trial after him, pled guilty to two counts of criminal counterfeiting after the jury returned a guilty verdict against Penton. Realizing that he too would be found guilty, Guerra pled guilty in order to get a reduced sentence under federal sentencing guidelines because of his willingness to admit guilt without trial.

The Penton and Guerra cases are just two examples in an aggressive ongoing campaign by federal, state and local officials to stop cigar counterfeiting. The message to counterfeiters: counterfeiting will not be tolerated. And it reconfirms the message 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.

Key West arrests. Additionally, last March, investigators and other law enforcement authorities in Monroe County, Florida – working in conjunction with Altadis U.S.A. – simultaneously raided seven Key West retail establishments, arrested the five individuals who own them, and seized a substantial number of boxes of counterfeit Montecristo, H. Upmann Romeo y Julieta and Cohiba cigars.

"We hope these arrests send a clear message to the cigar industry and the public in general that those engaging in cigar counterfeiting will be arrested, their assets will be seized and they ultimately will be held accountable," said Eric Workman, Senior Vice President of Marketing at Altadis U.S.A

Altadis U.S.A., strongly committed to the vigorous enforcement of its trademark rights, continues to work with state and federal law enforcement officials to use anti-counterfeiting laws to secure convictions of its brands' counterfeiters.

According to Theo Folz, President and CEO of Altadis U.S.A, "These are important victories for Altadis U.S.A., its distributors and consumers, as well as the entire industry…Altadis U.S.A. remains committed to ensuring that [its] 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 federal anti-counterfeiting in effect at the time of Penton's arrest had a "loophole" – it did NOT make it a crime to be in possession of counterfeit packaging materials. As a result, the courts had interpreted the federal anti-counterfeiting law as holding that defendants could only be charged as "counterfeiters" if they were selling counterfeit "GOODS" - i.e., full boxes of cigars. Because of this "loophole" in the law,  Congress passed the amendment to the federal anti-counterfeiting law in March '06.