Update
Federal law enforcement officers raided eight shops in San Francisco's Fisherman's Wharf district for selling counterfeit goods. Officials say it’s the largest law enforcement action ever taken against designer knockoffs on the West Coast.
Shop operators and sales clerks were arrested for selling fake designer clothing and accessories from China worth millions of dollars. The items were marked with false labels for Nike, Coach, Louis Vuitton and other well-known brands. The merchants and clerks were charged in a federal court with conspiracy, smuggling goods into the US, and trafficking in counterfeit goods.
US Customs and Immigration Director John Morton warned bargain shoppers that buying fake goods is bad for them and bad for the US economy. He said trademark infringement and illegal importing of goods costs this country much needed jobs and business revenue, and it threatens consumers’ health and safety.
Original Article
Most of us have seen it, either at a flea market, a tent sale in a parking lot and even online. Big name, high quality goods being offered at prices that are drastically lower than what you'd pay at a store. Athletic shoes, purses, electronics, perfumes and even art work can be found at bargain basement prices. Unfortunately, many of these goods are fake, counterfeit or "knock-offs." For the buyers, there's no real bargain. And for the sellers, there's a possibility of jail time and hefty fines if they're caught.
What to Look For
The most common form of fake or counterfeit goods are low-grade items that are altered to make them appear to high-quality, name brand goods. Athletic shoes, purses, electronics and perfumes are good examples. The typical practice involves using labels and logos of well-known products and slapping them on items made by someone else. For example, putting the Nike "Swoosh" or sewing the Armani label into shoes or clothing .
In 2008, the US Customs and Border Protection (CBP) and US Immigration and Customs Enforcement (ICE) seized over $272.7 million in counterfeit and pirated goods as they were brought into the US. These items included computer network hardware, sunglasses, pharmaceuticals and perfume. Footwear was the number one counterfeited item seized.
Phony goods go beyond everyday items like shoes and clothes, too. Forged artwork has been around for centuries, and recent events show that it's still a big business. For example, the Federal Bureau of Investigation (FBI) is investigating an art dealer's claim that he paid $30,000 to William and Beryl Ann Toye for paintings that turned out to be forgeries. The FBI is investigating the Toyes' art dealings back to the 1970's when William was arrested for art forgery.
And, not too long ago, the FBI busted a multi-state and international art forgery ring that was using eBay to sell thousands of pieces of fake and forged artwork.
The Downside
For the buyer of fake or counterfeit goods, the downside is obvious. You don't get the "deal" you thought you were getting. More often than not, the item you bought is low-grade, and doesn't last or live as long as the real McCoy. And the kicker: You'll probably never get your money back. Sellers often disappear or close shop.
For the sellers, there are some serious consequences if they're caught. There are numerous federal laws that make it illegal to make, ship or sell items that are forged, fake and counterfeit, such as:
- The Stop Counterfeiting in Manufactured Goods Act. This law specifically targets the practice of attaching labels to fake products and passing off to consumers poorly made items as brand-name ones
- The Trademark Counterfeiting Act of 1984. This law makes it illegal to sell or trying to sell goods that use someone else's trademark without permission, such as the Nike "Swoosh," for example
The penalties for violating these and other fraud-related laws may include:
- Up to five years in prison
- A fine of up to $250,000
- The loss of any other counterfeit or fake goods, as well as money made through the sale of the illegal goods and any other property that can be connected to the crime, like vehicles used to transport the goods or computers or machines used to make them
Don't Be Fooled
It may be a worn-out statement, but its message rings true: If it's too good to be true, it probably is. When the economy is tight, almost everyone starts bargain hunting. Especially during the holidays when we're trying to find the perfect gift while watching our budgets. There are legitimate deals out there, too. But be careful, and be realistic. The odds aren't good that the $5,000 Rolex watch on "sale" for $250 is the real deal.
Before you buy, research the product and the seller. Know beforehand what the going price is for the item you're looking at. Check into the seller's background. This is hard to do if you're at a flea market or impromptu tent sale, but many brick-and-mortar stores and Internet retailers can be researched through the Better Business Bureau (BBB).
Questions for Your Attorney
- I bought some counterfeit goods online, and the FBI is investigating the Web site. Will I get my money back? Do I need to contact the FBI and let it know that I was victim of the retailer's scam?
- I think the running shoes I just bought are fakes, and the person I bought them from is still running a little shop. Should I take the shoes back and confront him, or should I call the police?
- I made a bulk purchase of some goods that, I was told, were the official products but the price was reduced because of minor defects and imperfections. I started selling them at a flea market, and now I'm being investigated for selling counterfeit goods because, it turns out, the goods were counterfeits. Will I be sent to jail and fined?
