The US Court of Appeals for the Second Circuit affirmed a 24-month prison sentence and more than $111,000 in restitution for trafficking in counterfeit luxury goods, finding that the defendant’s supervisory role and the value of the counterfeit goods supported sentencing enhancements. The Court also concluded that harm to intangible trademark rights can support restitution under the Mandatory Victims Restitution Act (MVRA), including expenses incurred investigating the counterfeiting. United States v. Sow, Case No. 25-2621-cr (2d Cir. Nov. 3, 2026) (Leval, Wesley, Bianco, JJ.)

Adama Sow pleaded guilty to trafficking counterfeit goods after law enforcement seized more than 80,000 items bearing counterfeit luxury trademarks from storage units she rented at a Manhattan facility. At a sentencing hearing, the district court heard testimony from two storage facility employees concerning Sow’s role in the operation and from an expert retained by the affected luxury brands concerning the value of the counterfeit goods.

The district court applied a two-level sentencing enhancement based on Sow’s supervisory role and a 20-level enhancement based on the value of the counterfeit goods, which it determined exceeded $9.5 million but did not exceed $25 million. These enhancements resulted in an advisory sentencing guidelines range of 70 to 87 months’ imprisonment. The district court nevertheless imposed a substantially reduced sentence of 24 months’ imprisonment and ordered Sow to pay $111,419.32 in restitution to the luxury brands for expenses associated with the expert’s investigation and testimony. Sow appealed.

Sow argued that 28 U.S.C. § 994(j) favored a noncustodial sentence because she was a first-time offender convicted of a nonviolent crime. The Second Circuit rejected that argument, explaining that § 994(j) directs the Sentencing Commission to recognize the general appropriateness of noncustodial sentences for certain first-time offenders but does not require courts to impose such sentences. The Second Circuit found that the district court properly considered the relevant sentencing factors, including the seriousness and duration of Sow’s counterfeiting operation, and exercised its discretion by imposing a sentence substantially below the advisory guidelines range.

The Second Circuit also affirmed both enhancements. The storage facility employees testified that Sow directed at least one assistant who regularly handled merchandise and performed tasks on her behalf. Although Sow challenged the testimony as unreliable and based partly on hearsay, the Court explained that sentencing courts may consider hearsay evidence bearing sufficient indicia of reliability. The employees’ firsthand observations and the district court’s credibility findings supported the supervisory role enhancement.

The Second Circuit likewise upheld the district court’s valuation enhancement. The district court credited expert testimony estimating the street value of the seized counterfeit goods and reduced that estimate by 10% to account for sales in locations such as Canal Street rather than traditional retail stores. The valuation was supported by evidence linking the seized goods to Sow and financial records reflecting millions of dollars flowing through her bank accounts. The Second Circuit found that the district court’s methodology provided a reasonable estimate of the counterfeit goods’ value.

Sow argued that the luxury brands had not established [...]

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