Junk Metal: Inside the California Disney Pin Counterfeiting Bust

A Note on Sources

The following article is based primarily on documents on file with the Superior Court of California, County of Orange in the case of The People of The State of California vs. Larry James Allred and Robert Edward Smyrak, 11NF1191.

My research in these was supplemented by telephone interviews with the defense attorneys involved (I thank them for taking the time to speak with me); law enforcement press releases; public record searches; and, in a few instances, previous media reports from reputable news-gathering organizations such as the Los Angeles Times.—Mike Bastoli

S

eptember 29, 2011 was not a good day for Robert Edward Smyrak. At 8:00 AM in Courtroom N3 of the North Justice Center in Fullerton, California, the 52-year-old Anaheim man appeared before Judge Nicholas Thompson of the Superior Court of California, Orange County to receive his sentence.

Smyrak, who goes by Bob, was pleading guilty to one count of felony trademark infringement. The penalty, at least as paper, would be one year in jail, three years probation, plus restitution. In truth, because of overcrowding in California’s prisons, he would serve out his sentence entirely at home, through supervised house arrest. But it was still, to be sure, an unfortunate turn of events for the IT operations manager whose most serious prior conviction was for using a cell phone behind the wheel.

Smyrak’s journey into California’s madhouse corrections system had begun, at least in earnest, in the early days of 2010, with a little help from a friend, Larry James Allred, then aged 56 and a resident of nearby Walnut.

***

L
iving in a trailer at the Walnut Hills Mobile Home Community with his wife Misty, Allred had a history with the law, shocking but fading. In 1975, at the age of 19, Allred and an accomplice kidnapped a woman at knifepoint from a shopping mall parking lot in San Bernardino County, drove her to the Los Angeles area, and raped her. The men were arrested and Allred was convicted of forcible rape. While his companion got probation, Allred was sentenced to prison, technically speaking.

Existing state law at the time allowed 18- to 21- year-old adult convicts to serve out their sentences in low-security housing facilities run by the California Youth Authority (CYA, now known as the California Division of Juvenile Justice). Late in January 1976, Allred escaped CYA custody and remained on the lam until he was apprehended three weeks later. It was his first strike.

In November 1977, freshly paroled, Allred repeated the outrage. Aided by a pair of friends, he kidnapped two young women at gunpoint—he held the weapon—and subjected them to a week of unspeakable horror.

The Azusa high school students, ages 16 and 17, had been walking along Citrus Avenue near the Covina area of town when the three men picked them up, inviting them to join them for a party. They drove to an abandoned car wash in West Covina where Allred had once worked. The girls were tied up and raped. The men then moved them to other locations, including a cabin in rural Twin Peaks owned by Allred’s family, where they were again, repeatedly and viciously, raped and assaulted, all the while being threatened with death.

Allred even went so far as to personally excavate the girls’ graves, but changed his mind about ending their lives after learning that someone had seen him digging the pit; the observer was curious and questioned Allred’s buddies. The girls were released back in Azusa on November 24 after promising not to go to the police. It was Thanksgiving Day.

Now 23, Allred was arrested and subsequently convicted of multiple crimes in what became LA County Case A522648. But laws in place at the time again allowed him to avoid hard time in state prison. Instead, Allred was declared a “Mentally Disordered Sex Offender” and committed to the Patton State Mental Hospital.

Official court records disclose that Allred admitted to committing a number of rapes and attempted rapes, other than the ones for which he had been arrested and convicted. His usual MO was to wait in a bar or shopping mall parking lot and approach women as they exited. His first attempt was at age 14, when he hid in the backset of a woman’s car and used a fake gun; he escaped being caught.

Psychological assessments from Allred’s stay at Patton paint a disturbing portrait. “Crime indicates a need to dominate, control and humiliate females… possesses defective conscience,” comments one of the first, from August 1978. They also reveal a knack for private enterprise. From February 1981: “This resident was interviewed concerning his participation in drugs on the unit [sic]. He states that he had been selling marijuana on the unit [sic] for some time. He did not personally smoke it, but was running a business.”

Allred remained under treatment at Patton until 1984 when he was transferred to formal outpatient supervision at Gateways Hospital and Mental Health Center in LA as part of a Conditional Release Program or CONREP. He was discharged from CONREP in 1998. “It is the opinion of this program that although Mr. Allred will always be a sex offender, he is no longer a mentally-disordered sex offender,” the recommendation panel declared.

***

In 2000, Allred was driving in Pomona when he saw a 15-year-old girl walking on the street; she was crying. He stopped and asked her if she was alright and offered her a ride. The girl replied that she was fine and didn’t need one. Allred drove off. Seconds later, he made a U-turn and returned, insisting that she accept a ride to wherever it was she needed to go. On the run from her foster parents, she relented and asked to go to a friend’s house. Allred began driving to his mobile home in Walnut. He offered to let her stay the night.

According to Pomona Police Department reports and the Los Angeles County District Attorney’s Office, once inside, Allred allegedly pulled a knife and handcuffs, forced the girl to lie down, and began sexually assaulting her. “Please you don’t have to handcuff me, do whatever you want to do, just don’t kill me,” she later told police that she had begged him. “I was just kidding. Are you still thirsty?” Allred replied, heading into the kitchen to get her a drink. The girl ran out though the trailer’s glass sliding door and entreated neighbors to call the police.

Allred was arrested for sexual battery, false imprisonment, and failing to register as a sex offender. He admitted that he had picked up the girl and taken her to his place because she had nowhere to stay. He claimed the girl offered to have sex with him, but that he had refused because he “didn’t want to”. He forcefully denied owning handcuffs; police found them during their search of his residence.

Again, existing state law gave Allred an exit. At that time, there was no provision for “failure to register” prosecutions for offenders convicted prior to 1994. It was also his word against that of the troubled young woman. The case was dismissed. In 2005, Allred married Misty in Nevada.

***

Like most individuals encumbered with a record of serious sexual offense, Allred was also no stranger to financial difficulty. In April 1998, he filed for Chapter 7 bankruptcy and was discharged shortly thereafter. Four-and-a-half years later, in October 2002, the Internal Revenue Service imposed a federal lien for $15,106 in unpaid taxes.

By 2005 at the latest, Allred had discovered that there was money to be made in selling counterfeits through eBay—apparently his only source of income. It was a business he was evidently already familiar with. Misty would later tell police that Allred had been selling counterfeit pins since the 1984 Summer Olympics in LA (the year of his transfer out of Patton).

After a few years on his own, it must have seemed like a logical proposition to team up with Smyrak, who like him lived in a mobile home and had his own connection to counterfeit pins. It appears that Allred became Smyrak’s assistant, “the middle man” who fulfilled the online orders. At least that is what Misty told the arresting officers.

According to the prosecution, the men would purchase genuine Walt Disney Company collectible pins—the small, delightful, metal-and-enamel creations featuring beloved characters like Mickey and Minnie, Buzz Lightyear, and Winnie-the-Pooh—and ship them to China, where they would be replicated in the thousands by an all-too-willing manufacturer. While the genuine article retailed for between $6 and $14.95, the pair would wholesale the resulting copies online for about $1 each—“pennies on the dollar” as the DA would later put it.

It was a profitable market to be in. The appetite for the pins among the Disney fans who collect them is prodigious, and there are innumerable designs to choose from. One unofficial website for hobbyists, PinPics, reports over 50,000 registered users and 96,000 pins in its database. Another resource, an eBay guide for beginners (which warns against the dangers of counterfeits) suggests a number of different collecting strategies—a method to “your collecting madness”—ranging from a focus on favorite characters or movies to limited edition issues.

Disney had long offered collectable pins for sale at its theme parks and stores, and for years these had been traded by fans, but their popularity had grown since October 1999 when, as part of the Millenium Celebration, the company began an official Disney Pin Trading program, where visitors to the parks could exchange some of their pins with employees, as well as other guests.

Although there are a number of rules traders are advised to follow—Disney’s own “trading etiquette” guidelines list sixteen items, including “Trade one pin at a time, hand to hand” and “Please refrain from touching another person’s pin or lanyard”—it is, at its heart, a straightforward affair: spot a Disney “Cast Member” wearing a pin-laden lanyard, ask for a moment of their time, find a pin you’d like, then hand over one of your own to complete the transaction. Thousands of trades are conducted daily. Clearly, there would be no dearth of buyers.

***

By February 2011, the men had become accomplished importers, having already handled some eighty consignments, later assigned a street value of approximately $2 million by the Orange County District Attorney’s Office. They must have shared an anticipation for the next shipments and the expanded opportunities their contents would bring them.

Soon enough one arrived, by cargo plane at Los Angeles International Airport, the hive of activity better known as LAX. The sizable parcel immediately drew the attention of United States Customs and Border Protection officers. (What in particular caught their eye, or if it was simply a case of random inspection, is not clear.) Agency import specialists decided to take a closer look. Opening the parcel, which was addressed to Smyrak, they found thousands of pins. Among them: Thumper from Bambi, Belle from Beauty and the Beast, and one of the nameless, three-eyed aliens from the Toy Story series. The package weighed 150 pounds.

In the state of California, as elsewhere in the United States, there are certain things you do not want law enforcement to find in you in possession of: a dead body; large amounts of illicit drugs; fake brand name goods intended for resale. A joint investigation was opened by United States Immigration and Customs Enforcement’s Homeland Security Investigations division (ICE HSI) and the Anaheim Police Department.

Smyrak and Allred were taken into custody on April 14 by officers of the Anaheim PD and charged with one felony count each of manufacturing and sale of a counterfeit mark. Smyrak’s former girlfriend, named Cynthia Lynn Pratt Vedder, was also read her rights that day, being accused of independently engaging in the same type of scheme. (She pled guilty in July 2012.)

Allred was at Smyrak’s home in Anaheim that day; Smyrak was three miles away, working at Jadtec Computer Group in Orange, where he had been employed for twenty-five years. Their residences were searched. (The warrants were signed by Orange County Superior Court Judge Richard W. Stanford, Jr., who in less than a year found himself removed from the bench for fixing traffic tickets for his family, friends, and church pastor.)

Entering through Smyrak’s door, officers found Allred seated at a desk, writing “50 Thank You” on a padded mailing envelope stuffed full of Disney fakes. At Allred’s place, police entered a virtual Disney warehouse, with pin-filled cardboard boxes, plastic bins and trays stacked, quite literally, floor to ceiling. Numerous sales receipts, invoices, and other papers documented the enterprise. There was even an official notification, less than a month old, from U.S. Customs and Border Protection, informing Allred that another shipment of pins had been seized at LAX on March 17 for infringing Disney intellectual property. (The resale value of the items seized in that package alone was $20,000.) It was the very definition of being caught red-handed. All told, at the time of their arrest, the pair were in possession of more than 90,000 bogus pins.

ICE HSI’s special agent in charge in LA., Claude Arnold, provided the main quote for the subsequent press releases, issued by the federal agency and the DA’s office: “American businesses and American brands are under assault from counterfeiters. The sale of counterfeit products robs Americans of jobs, stifles American innovation, promotes crime and introduces substandard and sometimes harmful products into commerce. The only ones who benefit from schemes like this are the counterfeiters and they’re getting rich at America’s expense.”

Smyrak was released from custody on $50,000 bond, proffered by Bail Hotline Bail Bonds, a statewide chain of bond agents. (“Arrests can happen at anytime, which is why we never close,” their website informs prospective clients.) Allred, represented by an attorney from the office of the Orange County Public Defender, was let out on his own recognizance, but was rearrested five days later and remanded to the county jail. The case went to Orange County Deputy DA Charles “Chuck” Lawhorn, a prosecutor with the specialized Major Fraud/White Collar Crime team.

Appearing for a combined pre-trial hearing on the morning of May 13, Smyrak was facing a maximum sentence of three years in state prison if convicted. But it was Allred who naturally had the the most to fear. Because of his previous convictions, the People would seek the minimum twenty-five years to life under California’s Three Strikes law, which allows life sentences for non-violent crimes when they are preceded by convictions for rape or child molestation.

Under interrogation, Allred maintained that Smyrak was paying him a paltry $200 per week to process the eBay orders. Police balked at the claim, especially the suggestion that it somehow made him less culpable. Lawhorn would later call it a “variation on the Nuremberg Defence”—just following orders. Allred, in fact, acknowledged that he knew what he was doing was illegal, but that he was “helping people out” because instead of paying, say, $9 for a collectable pin they wanted, they could now own it for only one dollar.

Smyrak soon decided to cut his losses and admit to his role—and Allred’s—in his own videotaped interrogation. It was, the prosecution said, a “candid” interview. He would take the DA’s offer and plead guilty. After the legal dust had settled, however, Smyrak would have a different story for the local press, told through his attorney, a lawyer from nearby Riverside named Skip A. Feild.

***

“He’s your typical person who loves Disney and Disney products,” Feild told the City News Service wire, calling Smyrak an “average guy who holds a regular job and goes to work every day.” Smyrak prided himself on having worked at Disneyland years before as a train operator (investigators were not able to corroborate this).

“It’s not like he was selling these things out of a dark alley. He was selling them on eBay. He got them at a good price from China and was running a business and in comes ICE and the police saying it’s all bad stuff.”

Smyrak had never sent genuine pins to China to be reproduced, Feild insisted. He and Allred had only made the mistake of responding to online ads for pins advertised as overruns or slightly damaged—“scrappers”—a far less serious offense.

Scrappers, in the parlance of trading enthusiasts, are unauthorized, extra-contractual pins produced by the same companies Disney contracts to manufacture the legitimate article. In other words, counterfeits made from the same molds as the originals. (There are also “fantasy” pins, bootleg original designs featuring Disney characters.)

Most commonly sold in bulk over the Internet, the quality of these can be inferior—wrong colored areas, for example—but they are often difficult to identify at first glance. Disney, for its part, has struggled to stem the tide, and discontinues business with companies caught engaging in the practice.

In any case, Feild stressed, “This stuff is junk metal. A lot of the pins are like the freebie giveaways Disney offers at the cash registers on special occasions. With every good Disney story there’s always a bit of fantasy and this is it.”

Lawhorn would not have it. He made a point of telling the Orange County Register that “Mr. Smyrak acknowledged, in open court, a factual basis for the plea that he willingly, unlawfully, and knowingly” engaged in the illegal scheme.

In a recent telephone conversation, Feild reiterated his view that Smyrak, who he says he now considers to be “almost like a friend”, was innocent of the charges and only pleaded guilty because of harassment by the prosecution and Disney.

“Any story that has Disneyland in it has a bit of fantasy,” Feild told me. “The police and Disney tried to trump it up to make it look like my client had sent pins to China to be reproduced. It was the companies that Disney actually contracts to produce the pins; they go out and try to convince people that they can sell the overruns.”

“My client is of modest means. He took the deal with the DA because he was facing the powers that be. They were threatening my client. It was intimidation by the police and the alleged victim.”

“You could see Disneyland from the courthouse,” he added, pointing out that the North Justice Center and the Disneyland Resort are both located off Harbor Boulevard, less than a twenty-minute drive apart. “Disney owns that town.”

“That was only an allegation,” Feild said of the prosecution’s assertion that Smyrak and Allred had sent authorized pins across the Pacific to be reproduced. “They never proved it. There was no evidence; we requested it. This is big corporate America versus the small fry trying to make a living.”

***

With the stakes significantly higher, the case against Allred proceeded at a slower pace than that against Smyrak. Because of a routine conflict of interest issue, neither the Public Defender’s office nor the Alternate Defender’s office could continue to represent him. The court appointed private attorney Earnest L. Eady, a Southern California lawyer with forty years of experience and a signature to dwarf John Hancock’s.

Although a trial was ostensibly a possibility throughout, it was obvious that it would be Eady’s job to negotiate a guilty plea in exchange for a lighter sentence. Allred’s exposure at trial would, in Eady’s words, be “horrible”.

Eady challenged Smyrak’s plea bargain claims. “It was a cover-my-backside scenario,” Eady told me earlier this month, implying that Smyrak would have said anything to get out of trouble, even if it meant railroading his friend. Speaking softly, and choosing his words carefully, Eady said that Smyrak was at least being “disingenuous” in his defense. He was the “head guy” behind the operation and got Allred to “do things he probably shouldn’t have been doing.”

In a unique approach to the traditional plea bargain, Orange County allows defendants in felony cases to entertain offers from both the prosecutor and a semi-retired criminal court judge, 77-year-old Robert Fitzgerald. Judge Fitzgerald is a controversial, thirty-year judicial veteran who once famously recited a poem while sentencing a killer to life (the killer was himself fond of verse). He is also regularly at variance with the prosecution.

Eady urged the court to dismiss Allred’s prior strikes, arguing that sending a man to prison for the rest of his life for selling bogus character pins would not be “in the interests of justice.” Lawhorn responded with a lengthy filing discussing Allred’s criminal history and the legal propriety of California’s often draconian Three Strikes provision.

The prosecutor also highlighted the adverse economic impact of counterfeiting, citing a 2007 study by the Los Angeles Economic Development Commission (LAEDC) that found that, just in LA County alone, more than 100,000 jobs, $5.2 billion in legitimate sales, and $559 million in combines tax revenues had been lost to fake goods. “The defendant did more than just infringe the intellectual property rights of Disney,” Lawhorn told the judge, “in the process he also stole from all of us.”

Fitzgerald brushed aside the prosecution’s wishes. He extended to Allred a more palatable option: eight years behind bars—a sentence that, with California’s complicated day-for-day credits system, would translate to only a further three years of incarceration. The deal would require Allred to admit to his prior strikes. He would also have to pay $201,000 in restitution to Disney, although everyone involved recognized this was not likely to happen.

On March 6, 2013, Allred accepted the offer. Even as the DA’s office talked up the successful conviction in their press release, they maintained the position that Fitzgerald’s offer was too lenient. “Given the horrific nature and despicable facts involved in the defendant’s prior convictions,” Lawhorn said in prepared statement emailed to me, “the People’s position in this case was that [twenty-five to life] was the appropriate sentence.”

Allred was formally sentenced on July 15, having spent 752 days inside Orange County’s maximum security Theo Lacy Facility. He is currently awaiting transfer to state prison.