Feds crack down on sellers of fake goods

[November 29, 2011]  WASHINGTON (AP) -- The knockoff designer bags look close enough to the real thing that few would notice at a casual glance. Same goes for the imitation replica football jerseys or popular boots. And the online prices seem too good to pass up.

But the products are fake and the websites selling them are breaking federal law by selling copies of high-end merchandise without giving credit or money to the real designers and creators. And while the products can look as good as the real thing, federal authorities warn that buying fake merchandise can be dangerous.

"Not only is this is a direct threat to American innovation ... but it's also a public safety issue," Immigration and Customs Enforcement Director John Morton said Monday as he announced that the government had shut down 150 websites accused of selling counterfeit merchandise.

Attorney General Eric Holder and Rebecca Blank, acting deputy Commerce secretary, are set to launch a campaign Tuesday at the White House to alert the public to the dangers of buying counterfeit goods.

"This is increasingly not simply a matter of `mom and pop' violations at the corner of Fourth and Main," Morton said Monday. "We are worried about organized crime and (that profits) are going to fuel other criminal activity."

Morton would not say if organized criminal groups are suspected of running any of the seized sites to help fund other criminal acts.

Some counterfeit goods, including medications and electronics, can also pose a health risk, Morton said.

Morton and Assistant Attorney General Lanny Breuer, who leads the Justice Department's criminal division, said Monday that in the latest crackdown authorities seized 150 website domain names where fake goods were being sold to unsuspecting bargain hunters.

"This is straight crime," Morton said. "This is people being duped into buying a counterfeit."

The federal government has seized the domain names of 350 websites since first targeting online counterfeiters in June 2010. Each investigation, Morton said, has grown.

Visitors to the seized domains are now greeted with a message from federal authorities explaining that the site has been seized by the government and a warning that "willful copyright infringement is a federal crime."

Morton and Breuer said while the domain names were registered in the United States, most of the websites were run from abroad, primarily in China. No one has been charged with a crime in connection with the most recently seized domains. But Breuer said the investigations are ongoing.

Earlier this year five people were indicted in Virginia on conspiracy and copyright infringement charges for their roles in operating a website that the Justice Department said allowed people to illegally download high-quality movies and television shows.

Four people accused of running NinjaVideo.net have pleaded guilty. A fifth person is being sought.

It's unclear how much money the seized sites have made, or potentially cost legitimate companies. Breuer said since the crackdown on counterfeit sellers started last year, Internet users have gone to the seized domains more than 77 million times.

"Typically we don't track the volumes of sales of these particular sites," Morton said, adding that criminal organizations often hide ill-gotten profits. "It is very large figures. Well, well above millions."

[Associated Press; By ALICIA A. CALDWELL]

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