Ahmed Mohammed Obaid, 48, of Oakland, and Faisal Mohamed Kaid Alomari, 34, of Richmond, are alleged to have sold counterfeit apparel and athletic shoes at their stores, U.S. Attorney Melinda Haag said Tuesday.
Obaid is the owner of the San Pablo Smoke Shop in San Pablo and Rex Market in Oakland. Alomari owns the Richmond Smoke Shop in Richmond.
The indictments allege that the stores purveyed goods bearing fake trademarks of companies including Nike, True Religion, and Rocawear.
Obaid was charged with six counts of trafficking in counterfeit goods, and Alomari was charged two counts of the same offense.
Both men were arrested and made their initial appearances in federal court in Oakland on Tuesday before being released on $100,000 bond.
The defendants are scheduled to return to court today to appear before U.S. Magistrate Judge Donna Ryu.
The maximum statutory penalty for each count of trafficking in counterfeit goods is 10 years in prison and a fine of $2 million, plus restitution if appropriate.
The prosecution is the result of a six-month investigation by the Department of Homeland Security and Immigration and Customs Enforcement.
Assistant U.S. Attorney Michelle Kane is prosecuting the case with the assistance of Laurie Gomez.