A really interesting article about secret shopping for fakes

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sonya

sonya

Member
Feb 23, 2006
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#1
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Issue 463: August 12–19, 2004​
[/FONT]TimeOut New York

[FONT=Arial, helvetica][FONT=arial,helvetica,geneva,swiss,sunsans-regular]SPIES LIKE US[/FONT][/FONT]
[FONT=Arial, helvetica][FONT=arial,helvetica,geneva,swiss,sunsans-regular]Knockoff designer goods and other fake products not only cost the city millions of dollars, but may also fund terrorism. Helping to bust these counterfeit rings is an army of "secret shoppers." That's where I come in. [/FONT][/FONT]


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[FONT=Arial, helvetica][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular] By Jane Borden[/FONT]
[FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]Photographs by Timothy Fadek[/FONT][/FONT]

[FONT=Arial, helvetica]It was a typically frenetic afternoon in Chinatown, and I was on a mission to find Louis Vuitton purses. Not the real ones. No, I was on the trail of the cheap knockoffs that line the walls of so many storefronts on Canal Street. Soon enough, I spotted my prey: a dozen handbags displayed on a shelf in a tiny, ramshackle stall no wider than a queen mattress. But while fingering the faux French fabric, I was startled by a loud clang. The vendor was shuttering his shop from the outside by pulling down the metal gate—and locking me inside, alone in the dark. I knocked tentatively on the metal barrier. "Hello? What's happening out there?"[/FONT]
[FONT=Arial, helvetica]In fact, I knew exactly what was happening. [/FONT]
[FONT=Arial, helvetica]I was working undercover, at $15 an hour, for Holmes Hi-Tech (HHT), a private-investigation agency no longer in operation. HHT specialized in intellectual-property cases and had been hired by luxury-goods manufacturers to collect information on counterfeiters—primarily in Chinatown—who were selling knockoffs of their designs. Today was a "raid day," which means we were seizing the phony products. During the preceding weeks, my colleagues and I had been surveying this handbag outlet, among others, to determine what sort of contraband it was peddling. In other words, we'd been pretending to shop. [/FONT]
[FONT=Arial, helvetica]Armed with our testimonies, Robert "Bob" Holmes, Holmes Hi-Tech's president, was now ready to pounce, backed by a hired group of off-duty cops and firemen who provided the muscle. As one of the moles, I arrived first to make sure that the products were still on the shelves. After sending my confirmation via cell phone, the raid team, who'd been waiting inconspicuously nearby, moved in.[/FONT]
[FONT=Arial, helvetica]I have little doubt that the merchant would have happily left me locked in there all day just to keep his contraband safe inside, but after Holmes and his crew flashed a court order, he reluctantly raised the gate. I scurried out like an innocent, frightened tourist, avoiding eye contact with the team. I'd have the chance to congratulate them over beers later that night.[/FONT]
[FONT=Arial, helvetica]While Holmes and the others nabbed the goods, I called the office to learn the location of my next assignment and then raced to the other end of Canal Street—as quickly as I could without drawing suspicion—in hopes of getting there before the news of the raid team's presence had spread to every vendor in Chinatown. Most knockoff stores have ties to one another, and they pass news of a raid via cell phones and walkie-talkies. Lookouts, dispatched by the store owners, stand outside each location and on crates at major intersections, scouring the streets for suspicious-looking shoppers and large vans that might contain law-enforcement officials or mercenaries like ourselves.[/FONT]
[FONT=Arial, helvetica]Sure enough, when I arrived at my destination, a knockoff-handbag store almost identical to the first, one of the merchants was in back, furiously stuffing purses into a large black garbage bag. The place was still open for business, just not for the sale of counterfeit purses; no doubt the proprietor had gotten the word. Staying with my mission, I waited for her to leave and trailed her east along Canal Street to yet another handbag dealer a couple of blocks away. There, she entered a back room and emerged without her bag of contraband. The products—polyester "Chanel" scarves, plastic "Louis Vuitton" wallets, "Movado" watches worth less than Happy Meal toys—were what mattered most on a raid day, and that's why I never let them out of my sight. Investigators like Holmes (who died earlier this year) collect them as evidence for their clients, who have included Louis Vuitton, Rolex, Polo, Oakley, FUBU and Pokémon, to use in civil suits against the counterfeit traffickers, in the hope of getting them evicted from their stores. "After an illegal action has been documented three times in one location, it can result in an abatement of nuisance," says one private investigator, who requested anonymity. "The landlord is placed on notice. It's incumbent upon the landlord to put forth an effort [to evict the tenant]. If he doesn't, the police can go and padlock the location."[/FONT]
[FONT=Arial, helvetica][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]The great pretenders[/FONT][/FONT]
[FONT=Arial, helvetica]Counterfeiting is a multibillion-dollar industry, having accounted for 5 to 7 percent of global trade in 2002, according to the International Chamber of Commerce. In terms of unpaid taxes, each year the nefarious business costs our city up to $500 million (based on a city-sponsored study in 1994 adjusted for inflation by Mayor Bloomberg in December 2003). [/FONT]
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[/FONT][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]BIG BUSINESS According to one study, counterfeits cost NYC up to $500 million annually in lost taxes. [/FONT]
[FONT=Arial, helvetica]The industry is opposed by a dozen or so government and consumer agencies and scores of private-investigation and law firms. The police have had the power to confiscate goods and make arrests since 1984, when the Trademark Counterfeiting Act made the scam a federal offense. Organizations like the police division of the Waterfront Commission of New York Harbor, an agency under the jurisdiction of both New York State and New Jersey, undertake "large-scale efforts" like nabbing distributors, according to the commission's assistant chief, Kevin McGowan. Meanwhile, the NYPD's Peddlers Unit makes arrests on the streets. Even so, the police have their limits. "People see it as a victimless crime," McGowan says. "If you're a police manager, there's a lot going on—criminal activity of a higher level. Where do you throw your resources, at Chinatown or where some kids are running around with a gun?" [/FONT]
[FONT=Arial, helvetica]The U.S. Customs & Borders Protection also pitches in, having seized $94 million worth of counterfeit products in 2003. Private investigators, meanwhile, obtain court orders to nab the fakes. Nonetheless, the storefronts on Canal Street continue to burst at their haphazardly stitched seams with illegal wares. Moreover, the knockoff trade is steeped in danger, even violence, and has clear ties to organized crime and suspected links to terrorism. So it makes perfect sense that the soldiers battling counterfeiters on the front line are...out-of-work actors.[/FONT]
[FONT=Arial, helvetica]I got the "secret shopper" job tip in the winter of 2001 at Peter McManus Café, a comedians' haunt in Chelsea, from a fellow comic who'd wanted to work for HHT himself but had been deemed ineligible due to a pesky felony cocaine conviction on his record. Before I started the job, though, the fuzz didn't even have my fingerprints. Of course, they do now, along with those of every other employee of HHT—strictly routine.[/FONT]
[FONT=Arial, helvetica]HHT liked to hire actors to be spotters, or "secret shoppers," because thespians are (in theory) adept at playing characters and transforming their personae. Most often I posed as a Southern tourist, because I come from North Carolina. One of my associates spoke French fluently, which was a huge asset; our superiors instructed us not to affect a foreign accent if we couldn't back it up (one spotter pretending to be from France found herself rattled when an Asian vendor responded in fluent French). Another was middle-aged, a boon in an office full of petite aspiring musical-theater actresses with dancer gaits and perfectly shaped eyebrows. One actor who'd been assigned to watch a single location for four hours straight adopted the guise of a junkie. Although his compelling transformation successfully deflected any suspicion as to why he hadn't moved for hours, he also attracted a hassling police officer and a proselytizing born-again Christian. Too bad his agent wasn't there.[/FONT][FONT=Arial, helvetica]
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#2
[FONT=Arial, helvetica]When you're spending six-hour days three times a week on Canal Street, shape-shifting is important not only for fulfilling your duties but also for holding on to your paycheck. Once you've been recognized by a vendor, or "burned," the pink slip is never far behind. Sometimes, spotters who'd been burned would know immediately. If you approach a shop and it closes its gates, you've been burned. If you turn around and a shopkeeper you've been watching is following to see where you're going, you've been burned. If passing a lookout sets off a chain reaction of cell-phone warnings that run down Canal Street like those mountaintop bonfires in The Return of the King, you've been burned. [/FONT]
[FONT=Arial, helvetica]Fittingly, a secret shopper's day starts with a trip to the "spotter closet," a trove of clothing and accessories provided for our disguises. We kept our options fresh; even purchases made while gathering intelligence—jackets, hats, scarves—were added to the inventory. Donations were encouraged: I used to bring in abandoned clothing from the basement of the Upright Citizens Brigade Theatre, where I often performed, though I doubt the George Washington wig was ever put to much use. After we picked our costumes and exchanged flyers for upcoming Off-Off Broadway shows, we'd head to Canal for our assigned beats. [/FONT]
[FONT=Arial, helvetica]Most days weren't raid days, but intelligence, or "intel," days. Our purpose on those shifts was to catalog the contents of stores in search of any kind of trademark infringement. Virtually any product—bags, watches, ties, visors, hair clips, place mats, dog collars, you name it—can be found with a fake logo on it, regardless of whether a legitimate designer counterpart even exists (see "Nothing like the real thing," opposite page). More specifically, we were looking for our clients' trademarks. We sought to discover which stores carried which products, both by trademark and type, and where those items were stocked in the store and in what quantity. This was a serious challenge on a street where one address, say, 600 Canal Street, is broken into numerous subleases: 600A, 600B, 600B-1, 600B-1π and so on. Rain Man jokes were frequent. [/FONT]
[FONT=Arial, helvetica]Though some stores display their loot in full view, others are more cautious. On occasion we'd encounter vendors who would inadvertently help our cause. This was especially amusing when they, not knowing our true identities, would "reveal" to us how our own jobs worked. One merchant told me that he couldn't display his goods, because "the spies are out." Another time, I asked a merchant if he had "LV" in the store and he whispered, "Not now." [/FONT]
[FONT=Arial, helvetica]"Why?" I responded, vapidly. [/FONT]
[FONT=Arial, helvetica]Nodding his head toward an innocent shopper, he said, "Come back later when she's gone. She pretend to shop, but she spy." A moment later, he threw the tourist out of the store so that I, the spy, could continue to shop. One time a vendor even told me that if I wanted a watch, I'd have to come back on a weekend, because that's when "the guys in the vans don't come." [/FONT]
[FONT=Arial, helvetica]He was right about that. HHT was a Monday through Friday, nine-to-five operation, and the illicit vendors knew it. Thus, they would keep their counterfeit inventory scarce during the week and flaunt it brazenly on the weekends. On the rare occasion when we'd raid a store on a Saturday, it was like hitting the jackpot. Usually, though, we trudged along less crowded streets on weekdays, no matter the weather or circumstance, trying to convince the vendors to show us their stash, which they kept hidden behind makeshift plywood panels, in cabinets concealed by displays and in back rooms. Only people they trusted gained access. I learned to notice the wall paneling in some locations—the outline of a door but without a handle, for instance. With the press of a button on a remote control kept in the merchant's pocket, the door would open, revealing a tiny back room full of fake handbags, gauche female shoppers who'd been invited in and a excitedly haggling vendor. In some stores this all happens behind a hanging Pokémon bedsheet, which itself is counterfeit.
[/FONT][FONT=Arial, helvetica][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]Tag, you're it[/FONT][/FONT]
[FONT=Arial, helvetica]While some display items already have name-brand tags on them, many have none. In these cases the vendor keeps a plastic bag filled with designer tags, and after you've chosen your style, any tag you want can be attached. I watched one woman holding a Prada-style satchel tell the salesman that she liked it, but she'd wanted a Gucci. Could she get a Gucci tag on it, please? Done. The bag of tags was the most valuable treasure we could find; tagless purses are safer to display, since in most cases the trademark is in the brand name itself. The court order obtained prior to a raid allowed Holmes and his crew to confiscate any trademark-infringing products, and our managers told us that a freestanding tag proved an intent to attach it to a blank bag. Therefore if the raid team found a stash of 100 tags, they were allowed to take 100 tagless bags off the shelves, which they would eventually destroy. [/FONT]
[FONT=Arial, helvetica]According to U.S. Customs, many counterfeit products are shipped to the States without trademarks. The tags, watch faces and other identifying characteristics are made elsewhere, shipped separately and applied upon arrival. Some manufacturers, like Louis Vuitton, hold a trademark on a pattern that's part of the product's design. Getting those kinds of counterfeit goods into the country is more difficult. At the office we had a box of black wallets confiscated by customs officials, which we kept around for show-and-tell. Incisions had been made along the seam lines of each wallet, revealing that the black was simply a plastic covering. When you pulled it back you'd find the Louis Vuitton pattern underneath.[/FONT]
[FONT=Arial, helvetica]One reason the counterfeiting business doesn't diminish in the face of raids is that the hefty profit margins outweigh the fear of seizure and prosecution. According to the Waterfront Commission's McGowan, counterfeiters who get caught face mostly fines. "These people don't get hard time," he says. Guilty parties write off such penalties as the cost of doing business. [/FONT]
[FONT=Arial, helvetica]A 2003 federal court action in Manhattan that pitted watchmaker Cartier and its parent company Richemont International against numerous defendants revealed that counterfeit watches costing $1.34 each to produce were being sold for $115. That's a markup of more than 8,000 percent. Plus, a counterfeiter with a storefront on Canal Street usually has mountains of products scattered in storage spaces across the five boroughs; one seizure amounts to a mere drop in his bucket of cash. [/FONT]
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#3
[FONT=Arial, helvetica][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]The African connection [/FONT][/FONT]
[FONT=Arial, helvetica]Dealing with the "Senegalese," as our man-ager referred to any roaming African vendors, required a completely different plan of attack. Their briefcases full of Oakleys and Rolexes or sheets covered in pirated DVDs were their sole means of making a living, and they guarded their stock more tenaciously than even the Asians did. During my undercover stint, the "Senegalese" stayed clear of Chinatown, preferring Battery Park, the Empire State Building and other areas heavily trafficked by tourists. To confuse us, they all dressed alike, rendering a suspect description worthless. They were an army of tall black males wearing baseball caps, jeans and navy-colored, puffy jackets. On a raid day, the most important information I could provide was a head count of the perpetrators. With no gates to close at the scent of fear, their strongest protection was the pack, which was most dangerous when those packs were discreet. You'd see one seller alone, but around every corner were others hocking their own wares in close-enough proximity to emerge and then ambush Holmes and his crew as soon as they approached. At times this tactic worked, sending the raiders into retreat. Then there were the women pushing carts, typically filled with fake Polo shirts or illegal electronics, but they chose to fight with ignorance instead of force. We dubbed them the "ostrich ladies"—when they saw a raid team coming, they'd simply step a few feet away from their carts and pretend not to know anything, even though we were rarely interested in their minor-league operations (though we were curious who their suppliers were). [/FONT]
[FONT=Arial, helvetica]Teaching us about the sophisticated techniques of the Senegalese was the duty of the spotters' manager, whom I'll call Lauren. She had been an actor herself and started at HHT as a spotter. Lauren held a training session every few months for those who'd recently joined the team. In addition to the expected reviews of rules and daily duties, she told stories of what she'd witnessed in Chinatown. Lauren said that the many slinky staircases, suspicious air shafts and miniature doors in back rooms lead to the bowels of Canal Street, a maze of tunnels and hidden chambers harboring everything from caches of counterfeit goods to indentured servants—illegal aliens toiling over watch faces in puddles of their own urine. [/FONT]
[FONT=Arial, helvetica]Lauren also told us about Canal's territorial traditions: how the Chinese vendors worked on one side of the street and the Vietnamese plied their trade on the other. We heard lore from the old days, when gangs ran rampant, when there were scuffles in the street, a bounty on Bob Holmes's head and an attack on his life by a guy wielding an ice pick. (In fact, one Chinatown merchant accosted a TONY photographer assigned to shoot images for this article, shoving her camera against a wall.) Lauren anticipated our sympathy for the vendors. "Sure, they dress poorly, but they live in $2 million homes on Long Island," she'd say. "Everyone is involved. Nowhere is clean. Nowhere is safe." The waiters at the noodle shop, the woman pushing her baby stroller, the kid selling sodas, the elderly mah-jongg players in Columbus Park—all are in on it. She advised us to never go into the bank to take notes, to never adjust our disguise in Pearl Paint. She even warned us against asking for a receipt at the pizza joint. Indeed, I once happened across a multi-thousand-dollar phony-Rolex deal while going to the bathroom at the Holiday Inn on Lafayette Street. [/FONT]
[FONT=Arial, helvetica][FONT=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]T-shirts—and terrorists[/FONT][/FONT]
[FONT=Arial, helvetica]Lauren's most ominous tale was the legend of the Hard Rock Cafe T-shirts. According to her, the 1993 bombing of the World Trade Center was funded in part by the sale of counterfeit Hard Rock tees right here in Manhattan. As she told it, the plotters recruited alcoholic, homeless Vietnam veterans to man the corner stands, since it's easier for vets to attain the coveted vendor licenses. The FBI's New York Joint Terrorist Task Force supports this story, according to an article in U.S. Customs Today. The FBI also compiled strong evidence during its investigation into the bombing, tracing some of the plotters' funds to the sale of counterfeit textiles in a store on Broadway. Certainly, September 11 has drawn more attention to the issue, and over the past few years, more suspected links have been discovered, mostly overseas. Last year, Mohamad Hammoud was sentenced for his connection to a cigarette-smuggling operation that was funding Hezbollah, and in 2002, the U.K. determined that the source of confiscated packages of counterfeit shampoos, creams and perfumes was a member of Al Qaeda. [/FONT]
[FONT=Arial, helvetica]In 2002, Bob Holmes made a couple of discoveries himself. According to an article in Managing Intellectual Property, Holmes found a suitcase full of fake watches and Boeing 767 flight manuals covered in Arabic notes during a midtown raid. Also, in a handbag shop, he came across faxes pertaining to the purchase of bridge-inspection equipment. Later, a list of that shop's employees was found in the home of a known Lebanese crime-syndicate member, along with fake driver's licenses and a list of suspected Al Qaeda terrorists. [/FONT]
[FONT=Arial, helvetica]The anonymous investigator who spoke to me says that the suspected links to terrorism come from midtown, where most of the counterfeiters are Middle Eastern; any terrorist connections to Canal Street stem from cases in which Chinatown vendors trade with their midtown counterparts. "Canal Street is merely entrepreneurs and opportunists," he says. Even so, according to the Waterfront Commission's McGowan, "it's causing economic terrorism." [/FONT]
[FONT=Arial, helvetica]Given such dire consequences, the stakes of trading in counterfeit goods can be high, especially here in New York, where a jittery populace has not yet become reconciled to living in the constant shadow of terror. For us on the front lines, it felt like a losing battle, and I often wondered how much of an impact we actually made. The appetite for the symbols of status seemed to be exceeded only by the willful naiveté of Canal Street bargain hunters. Just a few weekends ago, while I was retracing my old haunts for this article, a shopper in Chinatown asked my advice about a wallet she was considering. "I can't believe it's real leather for this cheap," she giggled. [/FONT]
[FONT=Arial, helvetica]"It's not real," I told her. [/FONT]
[FONT=Arial, helvetica]"But it says so on the wallet," she said incredulously. [/FONT]
[FONT=Arial, helvetica]"That doesn't mean anything," I replied. [/FONT]
[FONT=Arial, helvetica]At that point she turned to the vendor, intent on settling this dispute once and for all: "Is it real?" [/FONT]
[FONT=Arial, helvetica]"Of course," he said, "it says so right there on the label." And with this she was satisfied. She even looked at me and said, "I told you so."

http://www.timeout.com/newyork/DetailsAr.do?file=/features/463/463.spieslikeus.html

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The descriptions about the bowels of Canal Street are horrific.
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#4
That's a very interesting article. I think you gotta look like a tourist to get the fakes .............. I've seen women selling fakes running through the streets of soho when the cops are around, it's kinda crazy... but tourists love it!!!!
 
#5
I've seen guys in Battery Park selling phony watches. They were so shady looking I was afraid to make eye contact with them even when they trying to get my attention.

Thanks for posting the article. It was definitely an interesting read.
 
#8
[FONT=Arial, helvetica]http://www.timeout.com/newyork/DetailsAr.do?file=/features/463/463.spieslikeus.html

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The descriptions about the bowels of Canal Street are horrific.
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I was wondering if anyone knew the answer to this...Something that stood out to me was that the "secret" passageways on Canal Street harbor illegal immigrants working on fake watches in horrible conditions. Setting aside illegal immigrants of Hispanic descent, how do other illegal immigrants, like Asians, come to the US? Asia is so far away, how do they get to the US without detection from border/ocean patrol? I know this is true, I just want to know how.
 
#9
ilovelouboutins said:
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The descriptions about the bowels of Canal Street are horrific.
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Click to expand...
I was wondering if anyone knew the answer to this...Something that stood out to me was that the "secret" passageways on Canal Street harbor illegal immigrants working on fake watches in horrible conditions. Setting aside illegal immigrants of Hispanic descent, how do other illegal immigrants, like Asians, come to the US? Asia is so far away, how do they get to the US without detection from border/ocean patrol? I know this is true, I just want to know how. [/quote]

you know... from what i heard from my asian friend, a lot of asians come here using tourist visa and they just never left. it is indeed a little too far to have secret passageway..... :smile:

you know... i have heard about the counterfeits and its relations to "the bad people". i also heard that the counterfeit business is used to laundry money (i dont know how true this is). but anyways.... i think people should be more educated about things like this so thet stop buying fakes. DH used to tell me to buy fake bags coz he did not think it is worth spending $$$ on bags. But i told him about what is behind the counterfeit industry and since then he doe not let me buy fakes.
 
#10
ilovelouboutins said:
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The descriptions about the bowels of Canal Street are horrific.
[/FONT]
Click to expand...

I was wondering if anyone knew the answer to this...Something that stood out to me was that the "secret" passageways on Canal Street harbor illegal immigrants working on fake watches in horrible conditions. Setting aside illegal immigrants of Hispanic descent, how do other illegal immigrants, like Asians, come to the US? Asia is so far away, how do they get to the US without detection from border/ocean patrol? I know this is true, I just want to know how. [/quote]

One way is of course, the tourist visa. That's if they even get a tourist visa. I have read in the papers about asians being smuggled in containers. Ever seen that movie "The Transporter"? Yup, that really happens.
 
#12
Pnay71 said:
I have read in the papers about asians being smuggled in containers. Ever seen that movie "The Transporter"? Yup, that really happens.
Click to expand...

I've read similar stories about Asian organized crime sydicates smuggling people into the country.
 
#14
ilovelouboutins said:
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The descriptions about the bowels of Canal Street are horrific.
[/FONT]
Click to expand...
I was wondering if anyone knew the answer to this...Something that stood out to me was that the "secret" passageways on Canal Street harbor illegal immigrants working on fake watches in horrible conditions. Setting aside illegal immigrants of Hispanic descent, how do other illegal immigrants, like Asians, come to the US? Asia is so far away, how do they get to the US without detection from border/ocean patrol? I know this is true, I just want to know how. [/quote]


Most asians that come to the US these days probably do one of these things:

1) tourist visa - These aren't that hard to get anymore with China opening up their economy etc. These people just go into hiding once their visa's are up

2) Student visas - same thing as tourist visa if they don't end up getting a green card after their education

3) Smuggling through other countries - sometimes these people still come by boat or through other countries. Some asians go to S. America first and then work their way up.

In Australia (which is EXTREMELY) isolated, there are still people that come by boat from all over the world including Afghanistan, they just travel to asia and go through fellow islamic countries such as indonesia.
 
#15
me_love_purse said:
are you serious?????
i watch a lot of law and order, and they actually have an episode about it. i thought it was not real..... :amazed:
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Nope...it's real. We have had several of those big cargo containers come in to Seattle ports filled with Chinese trying to sneak in. The sad thing is they ay these scumbags thousands of dollars to travel in a cargo container with 20-30-40 other people with a chance of suffocating, everyone defacating and eating in the container (can you imagine the smell)? When customs gets one of these they have to wear hazmat suits because they don't know what kind of exotic diseases the people have (TB, bird flu).

And if they do make it past customs, they are slaves working to pay off their fee to come here. It's sad. It's tragic. It's infuriating. People don't think that buying a fake is a big deal. Besides the fact that it's illegal, it also has far reaching consequences globally.

GREAT article!
 
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