SANTA FE, N.M. (AP) - Two bulk vendors of Native American-style crafts and jewelry pleaded guilty Wednesday in a video conference federal court hearing based in New Mexico to fraudulently passing off counterfeit crafts as authentic American Indian-produced goods.
Jawad Khalaf and Nashat Khalaf each pleaded guilty to a felony count of selling counterfeit crafts as if they were made by Native American artists. The proposed plea agreement awaits a likely decision by U.S. District Court Judge James Browning to take effect.
The case stems from sweeping international investigations that have traced jewelry and crafts from manufacturers in the Philippines to art galleries in New Mexico in violation of the U.S. Indian Arts and Crafts Act.
The 1990 law makes it a crime to falsely market and sell art as Native American-made when it is not. It was aimed at protecting the marketplace for authentic Indian crafts that provide a vital source of income for Native Americans across the U.S. while ensuring the preservation of ancient cultures.
Jawad Khalaf appeared by videoconference from Saudi Arabia, in a concession to travel restrictions related to the coronavirus, to accept the plea agreement under oath and acknowledge that he knowingly tried to sell a canteen in 2015 as an valuable work of indigenous craftsmanship.
The plea agreement includes a $300,000 donation to the U.S. Indian Arts and Craft Board, under the Interior Department, which provides support for authentic Indian art and crafts. No direct restitution was offered to Native American artists because the bogus item were not marketed as the work of specific artists.
Businesses owned or operated by the defendants - Sterling Islands and Al-Zuni Global Jewelry — would forfeit $280,000 in funds that were previously seized by the U.S. government. Seized craft items could either be destroyed or taken back overseas to be marked indelibly with the country of origin and possibly remarketed.
Prosecutors say the two defendants who pleaded guilty owned or operated companies based in Albuquerque and Gallup. Charges are being dropped against two other defendants named in a 2018 grand jury indictment on charges brought by the U.S. Attorney’s Office for New Mexico. Prosecutors say that a fifth defendant, Taha Shawar, is a fugitive from justice.
A 2010 amendment to the Indian Arts and Crafts Act broadened provisions to allow any federal law enforcement agency to conduct investigations, while a 2012 agreement put the U.S. Fish and Wildlife Service at the forefront of pursuing violations.
In 2018, New Mexico jewelry store owner Nael Ali was sentenced to six months in prison and a year of supervised release for selling counterfeit Native American jewelry.
That conviction and others incorporated evidence seized during raids by federal agents in 2015 on Indian art galleries in Albuquerque, Gallup, and Calistoga, California.
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