Berg Sportswear under investigation for illegal use of logos, money laundering, tax evasion

Federal agents watch as filing cabinets are loaded into a moving truck at Berg Sportswear in Corinna in January 2011.
Federal agents watch as filing cabinets are loaded into a moving truck at Berg Sportswear in Corinna in January 2011.
Posted Aug. 04, 2011, at 3:33 p.m.
Last modified Aug. 05, 2011, at 4:21 p.m.

BANGOR, Maine — Federal officials are investigating a Corinna business that does custom screen printing and embroidery for allegedly using the logos of professional sports teams, distilleries and a motorcycle manufacturer without permission on T-shirts, hats, caps and other merchandise.

Berg Sportswear Inc. and its owners are believed to be involved in trafficking in counterfeit goods, money laundering and tax evasion, according to court documents.

Owners Robert and Hedda Berg, both of Corinna, have not been charged in U.S. District Court. No charges have been filed against the firm.

Berg Sportswear continues to operate.

Reached Wednesday, the Bergs declined to comment on the investigation. On Thursday, the couple’s attorney, Charles Gilbert of Bangor, issued a statement on their behalf and that of the business.

“In January 2011, based on what we now know to be wildly inaccurate allegations by disgruntled former employees, several government agencies conducted a search of our property in Corinna,” the statement said. “What they found is a story more accurately told in what agents did not seize.”

What federal investigators did not take, according to the statement, was what constitutes the bulk of the company’s business: hundreds of thousands of items printed and embroidered with moose and deer; payroll and tax records showing that the business employs more than 20 local residents and pays tens of thousands of dollars in taxes, including property taxes paid to the town; print screens with the names, logos or mascots of hundreds of schools and towns in northern New England; and print screens for humorous and “politically incorrect” T-shirts and other items.

Assistant U.S. Attorney Joel Casey declined Tuesday to comment on the investigation and whether the Bergs or their company would be charged or when charges might be filed. It is the practice of the U.S. Attorney’s Office not to comment on cases until they have been resolved.

The federal statute of limitations is five years for felonies, according to the U.S. Attorney’s Office.

The couple’s business, located at 852 Dexter Road, and residence, located at 160 Stetson Road, were searched in January by federal authorities. The search warrants, the inventory of the items seized and related documents were unsealed last month. They had been sealed since Jan. 10 when the application for the warrants was filed.

“Specifically, [the] investigation to date has revealed that Berg Sportswear conducts the large scale manufacture, sale, and distribution of counterfeit merchandise bearing the marks of the Boston Red Sox, the Boston Celtics, the New England Patriots, the New York Yankees, Jack Daniels, John Deere, Johnny Walker, Harley Davidson and Orange County Choppers,” the 33-page affidavit requesting the search warrants stated. “[The] investigation to date also reveals that Robert Berg collects cash payment for some of the counterfeit merchandise and directs his personnel to falsely report the income on the Berg Sportswear books.”

Investigators seized business records, computers and dozens of boxes of merchandise from the business and residence, according to a custody receipt for seized property and evidence filed in federal court in Bangor. In addition to those items, more than $38,000 in U.S. currency and $740 in Canadian cash was found and seized in safes in the garage of the couple’s home.

“The affidavit recites that one of the participating agencies in the raid was the Maine [Drug Enforcement Agency], yet there was nothing in the affidavit which remotely suggested the presence of anything of interest to drug agents,” said the statement issued on behalf of the Bergs and their company, “and the totally false rumor that this search had something to do with drugs has been especially hurtful to our business.

“Similarly, despite rumors to the contrary, there were no illegal aliens or other undocumented workers at the job site, or employed by us,” the statement said. “Rather, what the agents found was a legitimate business trying to carry on and support its community and its employees in difficult economic times.”

Gilbert said Thursday that most copyright infringement issues are handled through civil actions that usually begin with attorneys for firms sending out “cease and desist” letters telling companies or individuals suspected of using logos and mascots without permission to stop using them or face a lawsuit.

John Deere is the only company that has sent Berg Sportswear such a letter, according to the firm’s statement. It took exception to the Corinna company’s line of hats embroidered with the words “John Moose” and “John Beer.” Berg Sportswear said in the statement that “established law permits us to parody established logos as long as we are clearly a parody.”

The company’s website Thursday did not feature items with logos from the teams or businesses Berg Sportswear is suspected of using without paying licensing fees. The website does include items featuring the University of Maine logo and image of the Black Bear, which represents the school’s sports teams.

Berg is licensed to use UMaine logos and images, according to Joe Carr, spokesman for UMaine.

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