Post links/research about counterfeits here


Jan 12, 2006
Please post links to articles and research you have found about what the counterfeit trade actually contributes to.
Including how it impacts our economy, terrorism, etc . . .

**This is NOT a debate thread**


Mar 23, 2006
England, UK.
Last edited:


Jan 12, 2006

INTERPOL media release
16 July 2003

INTERPOL warns of link between counterfeiting and terrorism.
Cites evidence that terrorists fund operations from proceeds.
WASHINGTON - INTERPOL Secretary General Ronald K. Noble has warned governments and law enforcement agencies that there is growing evidence of a link between intellectual property crime and terrorist financing.

In documents prepared for his testimony on 16 July before the U.S. House of Representatives Committee on International Relations, Mr Noble said the problem may become more serious in future and he called for enhanced efforts, including a new partnership between industry and police, to combat it.

'The link between organized crime groups and counterfeit goods is well established. But INTERPOL is sounding the alarm that intellectual property crime is becoming the preferred method of funding for a number of terrorist groups,' Mr Noble said.
'There are enough examples now of the funding of terrorist groups in this way for us to worry about the threat to public safety. We must take preventative measures now.'

Mr Noble noted that law enforcement agencies do not generally treat intellectual property crime as a priority area, and there is less funding for such investigations than for counter-terrorism or illicit narcotics.

'Law enforcement agencies have to recognize that intellectual property crime is not a victimless crime,' he said. 'Because of the growing evidence that terrorist groups sometimes fund their activities using the proceeds, it must be seen as a very serious crime with important implications for public safety and security.'

The INTERPOL document presented to the Congressional Committee indicated that a wide range of groups - including Al-Qaeda, Hizbullah, Chechen separatists, ethnic Albanian extremists in Kosovo, and paramilitaries in Northern Ireland - have been found to profit from the production or sale of counterfeit goods.

A range of products is involved, including pirated CDs and DVDs, and counterfeit clothing, computer software, and cigarettes.
'INTERPOL does not believe an investigation into intellectual property crime is over when there is a seizure of counterfeit or pirated goods,' Mr Noble said. 'We think further work needs to be done to trace the proceeds, and to establish links if possible with groups benefiting from these funds.'

The Secretary General called for the establishment of police contact points in each country for the exchange of information about such crime and a partnership between the private sector and INTERPOL to raise awareness of the problem and to facilitate cross-border investigations.

INTERPOL has already established an Intellectual Property Crime Action Group involving industry representatives. Mr Noble said the work of this group should be substantially expanded through a new partnership agreement with the industries affected.


Jan 12, 2006

Counterfeit Bags May Have Links To Organized Crime, Terrorism

Kate Spade's Attorney Going After House Parties

POSTED: 3:49 pm CDT May 8, 2003

A six-month 12 news undercover investigation found the hottest trend in home parties may have serious consequences.
WISN 12 News Investigative reporter Colleen Henry had no idea when she started the undercover investigation into purse parties and fake designer handbags that it would take such a serious twist and doubts the women, who've made a business of selling counterfeit chic, have any idea what kinds of violence the sale of these fake bags might be funding.
"Lots of women buying, very excited to be going through all these purses," 12 News producer Susan MacDonald said.

For six months, 12 News investigated the purse party phenomenon and finally went undercover when it couldn't score a formal invitation for the TV cameras.
MacDonald went to three parties -- from a nearly $500,000 Fox Point home to a Elm Grove strip mall to a $250,000 ranch house in Brookfield.
"Dozens of purses, everywhere, living room, dining room, kitchen, family room," MacDonald said. "There was Kate Spade. There was Prada, Gucci, Louis Vuitton."
While a real Kate Spade will cost you $150 to $300, a purse party fake is just $30 to $60 -- cash only please...
"At those prices, the bags and bag ladies fly out the door," Henry said.
"The problem is enormous, and why is the problem enormous? Because there is demand, and where there is demand, there's supply," Kate Spade attorney Barbara Kolsun said.

12 News Goes Undercover To Purse Parties
12 News Makes Disturbing Discovery About Fake Purses
Kolsun is the woman the New York Times dubbed the pit bull of the fake fashion police. She is the trademark attorney for handbag designer Kate Spade. She said the company's No. 1 problem now is the purse party.
"I just met with all of my investigators countrywide here Tuesday in our offices and they asked me what's your No. 1 priority for us for the year ahead, and I said, 'House parties, arrest those little ladies at house parties,'" Kolsun said.
Kolsun estimated for every real Kate Spade sold, there's a fake Kate Spade on the street.
Buying the fake bags isn't illegal, but selling them is. The designer label is protected by federal and state law. In other words, hustling counterfeit handbags is a crime that could cost you federal time.
"We're here to talk to you about your handbags," Henry said to the woman that sells the bags out of an Elm Grove strip mall.
"Are they real?" Henry asked.
"No," the woman said.
"So that would make them counterfeit?" Henry asked.
"I don't know," the woman said.
"You know it's a federal crime to sell that kind of stuff," Henry said.
"It probably is. You're probably right," the woman said.
"Can you tell us where you get these things?" Henry asked.
"No, I can't. I'm sorry," the woman said.
"Why not?" Henry asked.
Kate Spade's Kolsun said most purse party ladies get their goods either in New York's Chinatown or in Los Angeles' garment district. Counterfeit couture is their stock in trade and the vendors are fully aware it's illegal.
Blocks and blocks of fake handbags line Chinatown's streets, Henry said. Women from across the country come to buy in bulk.
In Chinatown, Henry found a Kate Spade for $16. It was the same bag MacDonald paid $44 for at a Brookfield purse party.
"This is a $2 bag and you paid $44 for it in cash and you don't know where that cash went," Kolsun said.
Kolsun said where that cash goes is the dirty little secret behind the purse party.
Federal investigators have traced the proceeds from the Chinatown counterfeits to a dangerous underground economy -- an economy thriving on sales to purse party dealers from America's nicest neighborhoods.
"They're supporting organized crime. They're supporting terrorism. They're hurting the economy," Kolsun said.
They support guys with names like Sammy Meatballs, Mike the Russian and Frankie the Fish, Henry reported.
Two years ago, federal prosecutors indicted more than 70 members of New York's Genovese crime family for a number of racketeering offenses, including trafficking in counterfeit handbags.
Even more frightening was evidence developed by the FBI's joint terrorism task force that the sale of counterfeit goods financed the 1993 World Trade Center bombing.
The U.S. Customs Service continues to warn that counterfeit designer bags may finance terror.
"That's serious stuff, and anybody who buys a knock-off bag should really think about that -- that that's what you're contributing to," Kolsun said.
The purse sellers that 12 News investigated likely had no idea where the money might have gone, Henry said.
"I'm the housekeeper, there's no one here right now," when Henry knocked at the Brookfield door.
"Well, it looks like everybody's here right now. There are a number of cars in the driveway," Henry responded.
"Do you know where this money goes?" Henry asked the Elm Grove seller.
"I don't know," the woman responded.
"Are you aware of the Genovese crime family is engaged in counterfeit and providing this kind of stuff?" Henry asked.
"No, I'm not," the woman said.
"Do you know this kind of counterfeit was found to have funded the 1993 World Trade Center bombing?" Henry asked.
"I'm not sure," the woman answered.
"Does that concern you?" Henry asked.
"Yes it does, but I'm going to leave," the seller said.
"It's not just about a knock-off Burberry purse or a knock-off Polo T-shirt, it's about a much bigger problem, and when you contribute to that problem by holding a purse party, going to a purse party and buying a couple of bags, then you're contributing to the bigger evil," Kolsun said,
Federal officials and anti-counterfeit investigators continue to link the sale of fake goods to organized crime.
Counterfeiting had been a relatively low police priority, but in this era of homeland security that appears to be changing.
As for the Milwaukee-area purse sellers, it's unlikely they were aware of the link, Henry said.
Still, anti-counterfeiters like Kate Spade's attorney vow to shut them down by either pressing criminal charges or a lawsuit.
How do you know if you're buying the real thing?
If you can peel off the label, it's a fake.
The real thing will have a tag indicating where it was made.
Real designer handbags are sold at either company stores or major department stores, not at home parties or on the street.
The bags 12 News bought for its research will be donated to a Milwaukee women's shelter -- once the designer labels are taken off.


Nov 4, 2007
sweetneet this is an EXCELLENT article.

It also contains a link to this Harpers Bazaar discussion about fakes.... also has other articles and statistics like some I have posted below as an example:

$600 Billion
Estimated annual sales in counterfeit products worldwide
$512 Billion
Global sales lost to counterfeit goods
$250 Billion
Annual loss to American companies from intellectual property theft
$20 Billion
Estimated loss to American companies from counterfeit products
$1 Billion
Estimated annual loss in New York City tax revenues due to counterfeiting
Number of jobs lost due to intellectual property theft in the United States
Estimated percentage of fakes among all goods produced worldwide every year


Nov 7, 2006

November 23, 2004

The Handbag? Total Knockoff. The Price Tag? All Too Real.


t is as much a rite of the New York holiday season as sidewalk Santas or crowded Fifth Avenue sidewalks: the proliferation of hawkers selling counterfeit products like the fake Fendi handbag, the replica Rolex watch and the pirated DVD.

The problem, according to City Comptroller William C. Thompson Jr., appears to be getting worse, and is hurting New Yorkers in ways they don't see: for instance, by costing New York City government more than $1 billion in lost tax revenue.

In a report assessing the economic consequences of the counterfeiting industry, the comptroller estimated that more than $23 billion in counterfeit goods changes hands in New York City each year.

"While they may pay a fraction of the cost of goods like a fake Coach bag that may look good, the people of New York City suffer," Mr. Thompson said. "There is a ripple effect. You can save in the short run but in the long run there is a loss."

City officials and counterfeiting experts from the fashion and entertainment industries say that it is not just Times Square tourists who buy pirated products. New York natives are interested in bargain-hunting for knockoff Kate Spade handbags and Louis Vuitton look-alikes, too.
And the merchandise doesn't all come from overseas. Warehouses stocked with counterfeit electronics and clothing can be found from Chinatown to Queens, and nearly 42 percent of all counterfeit CD's seized in the United States are made within the metropolitan area, the report said.
"We don't have to look to China to find bad actors," said David Benjamin, a senior vice president in the Universal Music Group's anti-piracy unit. "We can look right here."

According to the report, the $1 billion in lost city tax revenue comprises about $380 million in unpaid sales taxes, $360 million in personal income taxes and $290 million in business income taxes. And when combined with $1.6 billion in lost state tax revenue from the sale of counterfeit goods across New York State, the total loss of tax revenue reaches over $2.6 billion for 2003, the report said.

"The illegal trade activity is depriving our residents of necessary tax revenue at a time when New York City is trying to overcome one of its worst fiscal crises ever," Mr. Thompson added. He suggested that the figures had grown considerably over the past decade even though they had remained stable the past few years.

But the city's role in the counterfeiting industry is in itself staggering, the comptroller's report suggests. New York City accounts for roughly 8 percent of the $287 billion in counterfeit goods sold in the United States, the report said. And the comptroller said that the city's large population, its popularity as a tourist destination and the volume of merchandise that moves in and out of the Port of New York make it a major center for such illegal trade activity. More than $456 billion in counterfeit goods are exchanged worldwide each year, the report said.

Mr. Thompson called for the creation of a government task force and additional state and federal money to step up enforcement against counterfeiting. He also suggested increasing public awareness and enacting new rules to make it easier for customers to know when they are buying from legitimate street vendors.

The comptroller's call to crack down on counterfeiters comes as Hollywood lobbyists and Washington lawmakers have tried to curb the sales of bootlegged CD's and DVD's that infringe intellectual property rights and eat away at royalty fees. Fashion companies and law enforcement officials have been aggressively pursuing those who make and sell cheap imitation goods. But with every high-profile arrest, new merchants and manufacturers open their doors to take their place, industry experts said.

The report, released just days before the traditional start of the holiday shopping season, is a result of several meetings between industry and city government officials.

The comptroller's office said it decided to study the impact of the black market about a year ago over concerns about the lost tax revenue from the transactions that were visible on the street.

But a vendor hawking DVD's of current movies like "SpongeBob SquarePants" from a cardboard box, just a block from the comptroller's office in the Municipal Building, shook her head and smiled when asked about the plans. Would it really work? She declined to comment, but went back to peddling her pirated merchandise to passers-by.


Mar 9, 2006
Not sure if it counts as research/links, but National Geographic Channel has made a documentary called "Global Underground" and it's about the counterfeiting industry and the illegal industries it spawns from. Not sure when it airs in the US though.