After years of destroying evidence and ignoring court orders in a copyright and trademark infringement lawsuit, Mark T. Pappas, CEO of Creative Pipe Inc., was arrested at his beachfront condo in Central America, extradited to the U.S. and transferred to Maryland on Monday to face civil contempt charges.
Pappas, 45, owes more than $3 million in outstanding damages and sanctions stemming from what started as a routine spat over the design of site furnishings, such as park benches and waste containers, for state and municipal use. An arrest warrant for Pappas was issued on Dec. 28, 2011, after he missed court dates and failed to make required payments to Dunkirk, Md.-based Victor Stanley Inc., whose designs the Southern California-based businessman was determined to have stolen.
The warrant was served on Aug. 3, when, according to the San Pedro Sun newspaper in Belize, police arrested Pappas at his condominium in the Escalante area of the Ambergris Caye town. Apparently under surveillance prior to his arrest, Pappas had reportedly been living in the area for six months, was involved in a local real estate business and owned waterfront properties in Belize.
The paper, citing law enforcement sources, said Pappas gave police his full name when arrested and was taken to Belize City and, from there, was taken to the U.S. on a commercial flight.
According to the Federal Bureau of Prisons and the U.S. Marshals Service, after being taken into U.S. custody on Aug. 6, Pappas was taken to Houston and later to a transfer facility in Oklahoma. He was transferred to Maryland on Monday ahead his initial appearance in federal court on Wednesday to determine if he should receive bail.
He is also scheduled to appear in U.S. District Court in Baltimore on Friday for a hearing to show whether he should be charged with civil contempt, which carries potential fines or incarceration as punishment.
Randell C. Ogg, a Washington, D.C., solo practitioner who represents Victor Stanley Inc., declined to comment on the case on Monday prior to the initial hearing. Defense attorney James A. Rothschild, of Anderson, Coe & King LLP in Baltimore, did not return calls for comment.
In October 2006, Victor Stanley sued Pappas and his company, Creative Pipe, for downloading the company’s design schematics for benches and then having similar items manufactured in China. Pappas competed against Victor Stanley for site furnishing contracts using the pilfered designs under the trade name “Fuvista,” which Pappas later admitted was short for “FU Victor Stanley.”
The litigation in U.S. District Court in Baltimore was marked by repeated e-discovery violations, leading U.S. Magistrate Judge Paul W. Grimm to impose sanctions of more than $1 million on Pappas and recommend jail time in September 2010 for repeated contempt in September 2010.
U.S. District Judge Marvin J. Garbis rejected the recommendation to lock up Pappas at that time. However, he ruled last September that Creative Pipe’s actions amounted to unfair competition under state law as well as violations of the federal Lanham Act with false advertising and reverse palming-off. One bench design was also ruled to have infringed on Victor Stanley’s existing patent.
Garbis ordered monetary damages as well as injunctive relief on Sept. 30. The judge’s final order, issued Nov. 4, gave Creative Pipe until Dec. 1 to comply. When that deadline passed, Garbis gave the company until Dec. 15. To that point, Pappas had paid $478,409.
Pappas said in December he was unable to come up with the full amount owed and offered to make a $100,000 “good faith” payment and further installments of $20,000 a month.
While that arrangement was accepted, court records indicate that he has not made any further payments.
Pappas has appealed Garbis’ decision to the 4th U.S. Circuit Court of Appeals. That case is on hold over questions of whether the proper venue should be the U.S. Court of Appeals for the Federal Circuit rather than the 4th Circuit.