Authorities crack down on flea market fakes

[December 30, 2010]  TRENTON, N.J. (AP) -- Used to be, if you wanted a knockoff handbag or fake fragrance, Lower Manhattan's Canal Street was a mecca.

But with flea markets across the country now carrying the same kind of counterfeit products with poser trademarks, authorities warn that shoppers may get more than they bargain for in poor quality and safety risks while helping fund criminal syndicates in some cases.

"If the price is too good, you have to think about it," said Lt. Mike McDonnell with the New Jersey State Police cargo theft unit. "If you see it at a flea market and it's half the price of normal, you have to think there's something wrong."

The unit earlier this month seized more than 5,000 pieces of counterfeit product at a flea market in Springfield, including fake Estee Lauder and MAC cosmetics that retail for more than $300,000.

The safety risks of buying fake goods are real, experts say.

Counterfeit goods are different than so-called knockdowns, or cheaper brands. Knockdowns, like items sold by Wal-Mart, Target and other major retailers are required to undergo safety checks. Fakes usually are smuggled into the country and unregulated.

Safety risks include fake batteries that contain mercury, electrical products that don't meet safety standards, perfumes found to contain urine and high alcohol content, and clothing made with toxic dyes and flammable materials.

And if the potential health risks don't scare buyers, the economic risks and potential terror funding should, said Robert Barchiesi, president of the International AntiCounterfeiting Coalition.

"You support organized crime, gang activity, and terrorist organizations that use this as a funding mechanism," he said.

Barchiesi estimates the U.S. economy loses out on at least $200 billion in revenue and 750,000 jobs a year from counterfeit sales.

"This isn't a victimless crime," Barchiesi added.

The sentiment is echoed by local and federal law enforcement, who have been stepping up enforcement of flea markets and other counterfeit clearing houses.

"We're looking where that money is going and what crimes it could be funding," said Pat Reilly with the U.S. Immigration and Customs Enforcement agency in Washington, D.C., a division of the Department of Homeland Security.

This month alone, customs agents seized $250,000 worth of items at a swap-meet in New Orleans, $350,000 worth of goods at a flea market in Las Vegas, and $150,000 worth of merchandise at one in Solebury, Pa., that included fake trademarks for Nike, Polo Ralph Lauren, Oakley, Ray Ban, Coach, Louis Vuitton, Chanel, Gucci, Dolce & Gabbana, and UGG boots.

Reilly said most of the counterfeit products sold at flea markets and online are manufactured in other countries and smuggled into the United States where they are then packaged. The profit margin is huge.

At Rice's Market in Solebury, counterfeit UGG boots sold for $50 while the authentic sheepskin classics retail for as much as $180.

Manufacturers of the authentic merchandise have an interest in stopping the counterfeit business and often team with police to help tip them off and verify authenticity.

"We go to a great extent to produce a quality product that will last a long time for consumers," said Leah Evert-Burks, director of brand protection at Deckers Outdoor Corp., the high-end Australian show company that holds the trademark on UGG boots. "The damage to a brand can be if consumers think it's genuine and have a bad experience."

Jill Marvin, a spokeswoman for MAC and Estee Lauder, said consumers can be assured they are getting the genuine product by shopping at a reputable retailer.

To help consumers and to protect their brand, companies like Estee Lauder and UGG have also started listing authorized retailers on their websites.

But many shoppers still look for a great deal with high-fashion cachet

.

Sally Sessoms of Upper Dublin, Pa., didn't let the recent raid at Rice's Market get in the way of her annual Christmastime visit there on a recent Saturday morning.

Most people know the products are fake, she told The Intelligencer News. "But who cares?"

The recipient might, if they try to return it. Security experts say it will quickly become apparent that the goods are not authentic.

Kevin Dougherty, who has been investigating counterfeits since 1986 through his Manhattan-based company, Counter Tech, said retailers have sophisticated security measures in place to verify their products.

"Fragrance companies can track the fragrance back to the hour and minute it was made and the plant that it was manufactured at," Dougherty said.

And, Dougherty said, consumers have a lower-tech way to figure out if a product is real: Common sense.

"Generally, your best guide for a counterfeit handbag is a woman," he said.

[Associated Press; By BETH DeFALCO]

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