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this guitar might look like a real gibson but it's not this is coming from china wait it's and it's gibson s-o-n not s-u-n these are too coach bag with a michael kors zipper ooh we have nike sneakers here they're a part of a huge counterfeit industry worth over a trillion dollars and since these s come through the mail customs and border protection officers are tasked with seizing them in 2020 alone cbp seized over 26 000 counterfeit good shipments the knockoffs are getting better and better and more profitable for these counterfeiters not only are these products dangerous for consumers they've had cadmium arsenic lead and cyanide inside makeup and it's disfigured people perfume has had horse urine in it profits of counterfeits are known to fund criminal activity including attacks and bombings people think it's a victimless crime oh what's the harm i'm just buying this sparkle book what could it do it does a lot because the problem is where the money is going and as everything is now sold online buying counterfeit goods is getting easier but stopping them is much harder it's like whack-a-mole they come up you go after them they come down they go up again and here we have counterfeit watch that's customs officer steve nethersol he's america's first line of defense against counterfeits i've had many million dollar watch seizures we visited him at jfk to learn how he's spotting and stopping s all while the counterfeit market is surging counterfeit goods are anything that infringes on a company's intellectual property rights or ipr think air jordans rolex's or louis vuitton purses and because these products are trademarked counterfeiting them is illegal you can just be guaranteed that your product is going to get counterfeit it's just a matter of time half of the counterfeit goods cbp seized in 2019 came to the mail from china followed by hong kong and singapore before a package ever lands in the u.s cbp gathers intelligence on the sender container and aircraft using this intel and x-ray machines cbp narrows down a million packages into the ones that will get pulled for further inspection those suspicious packages will go straight to steve he'll start by looking at the box well i'm looking because i don't have my glasses on so i'm cheating the first when it comes in is the country of origin louis vuitton they're coming from france the watches coming from switzerland when it's coming from china bing that's your number one red flag then you look at the dilapidated boxes then he'll open up the package and this is from a familiar sender that sends counterfeit items possibly footwear ooh we have nike sneakers here this is obviously to save space but this is not traditional of the manufacturer to crush all these items we try and take care of when we open it up so that if it is something that's legitimate we'll tape it up and put it back the way it originally was but that's rare more than likely what he finds is the most common counterfeited handbag is louis vuitton the most counterfeited sneaker is nike air jordans here we have a rolex watch but how does he know their counterfeits well brands train steve on the telltale signs to spot a you'll sometimes send a kit and the kit will include a genuine product it'll include a kind of a hit list as to what to look for most of the hit list is kept top secret to protect the brand against counterfeiters but steve could share a few things rolex would never put their watches in little ziploc bags they don't put these inside it the silica gel rolex does not send to individuals in the united states they only sent to their retail stores i have another package here this one's coming from thailand we have an assortment of items here we have chanel eyewear we have gucci eyewear watches jewelry louis vuitton pouch high-end manufacturers like this never co-mingle their products in other words a gucci inside of a fendi or a louis vuitton these people will stuff watches a wallet inside a handbag they don't put any of this in it the filler inside it and their items wouldn't come in bubble wrap like this some of the counterfeits are obvious here we have a burberry coat and it says bird belly mistakenly on the button but some aren't as easy to spot the quality is getting better sometimes these factories especially in china it's the same factory that's making the good for the brand owner is also making the counterfeits and that's a real problem for the luxury brand owners sometimes the brands themselves can't even tell the difference some of the counterfeits are that good i've never seen one like this before so of course i'm gonna be delicate with it the packaging and the brand doesn't look like the normal counterfeit that we normally see it's coming from israel what is the country in manufacture for paul reed smith seoul south korea israel is not a manufacturer there are a lot of red flags it's like half and half it's got model code serial number upc number but for the country that it's coming from is the thing that's throwing me off so i'm gonna put it over here on hold and it'll be determined later on but in order for steve to seize anything there has to be a trademark on that product see what we got in here shirts yes it's all suzuki shirts suzuki has motorcycle and car trademark but not on apparel so this will end up being released but whether it's a copycat of a product that's trademarked or not counterfeits can be dangerous that makeup well it can cause rashes swellings and burns they've had cadmium arsenic lead and cyanide inside makeup and it's disfigured people cadmium is in rechargeable batteries and control rods in nuclear reactors perfume they've laboratory tests has shown there's been horse urine in it steve says safety equipment is even more alarming when it comes to automotive parts that's a very big danger spark plugs which can cause the engine to go on fire oil filters that cause instant damage to the engine airbags are a big thing that's something that you may not necessarily realize is something to even consider until you need that airbag and it doesn't go off in the protective way that it should counterfeit manufacturers have no regard to health or safety or who they hurt along the way all they're concerned about is the bottom line many studies have shown that counterfeiting is one way criminal organizations fund themselves the accused group in the 2004 madrid train bombing sold cds to partially finance their attacks for the 1993 world trade center bombing co-conspirators in that sold counterfeit t-shirts on broadway to fund that the two brothers behind the 2015 attack on the charlie hebdo publication that killed 12 people and injured 11 they funded their weapons partly through counterfeit nike sneakers and sometimes it's hard to make that connection between the person you might have bought on the street corner and organized crime activity but this activity that seems to be going under the radar can be lucrative for criminals and it's because it's high profit and low risk so when steve finds a counterfeit good he seizes it then he figures out the items msrp using the brand's website and cbp's internal database this one here would be about eleven thousand dollars that's the msrp what the manufacturer would be losing had this been genuine these are generally on the internet for about two hundred dollars in 2020 cbps seized over 26 000 packages for intellectual property rights violations that's a total value of over a billion dollars but it's not just the manufacturer's profits that take a hit their reputations do when a buyer doesn't know they've bought a knockoff and it falls apart it's the real company that customer blames and over time consumers trust in the brand is eroded steve does all the paperwork for every seized package then he stores the goods here we have a post on full of seizures so it's going to go into the storage room in the end all these products will be destroyed they're incinerated at a top secret location so what happens to the counterfeiters for one homeland security investigations can decide to open up a case but steve says that doesn't happen often the first problem the hsi agents there's only so many of them they're gonna deal with the most important thing which is narcotics all the fentanyl and the cocaine that comes out of killing people that is a top priority and it should be and the second problem the nature of counterfeiting is that these bad actors operate without respect for borders it's oftentimes very difficult to actually get an individual because they're not located in the u.s american authorities don't have jurisdiction in china where a lot of counterfeits are made so resting counterfeiters within the u.s is hard in 2020 homeland security investigations arrested 203 people for counterfeiting of those just 93 were convicted diane says a more successful tactic is going after counterfeiters online many sell their copycat products on platforms like amazon alibaba and ebay to fight the s online retailers have launched antique counterfeiting measures a lot of these marketplaces are really working with brand owners we do not want to be a place where a customer purchases an item that ultimately could impact their health and safety amazon's program is called project zero when companies register for amazon they give information on their brands trademarks and listings using this data amazon's algorithm scans five billion products a day for signs of counterfeiting it looks for things like blurry product photos copycat product descriptions payment information we look at price point we look at reviews and if a listing turns out to be a counterfeit amazon will suspend the account in 2019 amazon blocked 6 billion suspected bad listings on its site we might suspend funds we might quarantine inventory then amazon's new counterfeit crimes unit takes over formed in 2020 the units made up of former fbi homeland security agents and federal prosecutors like kibaru whenever a counterfeit is identified kibaro's team will send a packet of information to law enforcement this information can consist of ip addresses banking information email addresses that help us identify the person behind the computer and to skirt the jurisdiction problem the unit sends data to agencies all over the world to europol canadian law enforcement we partner and work with law enforcement on the ground in china local law enforcement does react when a brand owner comes to them and wants to do a raid and i've been involved in quite a few of them where they're really successful and we can then decide whether we want to pursue a civil suit or if we want to pursue a criminal enforcement action against them but even if counterfeiters are caught sentences tend to be low for counterfeiting offenders could face 10 years in prison compare that to say drug trafficking where punishment can range from 20 years to life in prison all the way up to a death sentence and counterfeiters are getting creative and making their products seem legitimate from creating amazon listings to flooding the u.s trademark office with phony applications it is frustrating that it doesn't stop that every day there's new infringements that we uncover for clients and it's all led to a surging industry for counterfeits today it makes up 3.3 percent of global trade when counterfeits are being sold oftentimes taxes aren't being paid for those goods and they in turn can impact economies as well by 2022 the counterfeits industry is expected to suck 4.2 trillion dollars from the global economy and they could endanger over 5 million legitimate jobs because we're dealing with a moving target it's a challenging crime problem to address it grows every day and it's because of consumer demand people need to be educated more about the dangers and the old saying if it seems too good to be true it probably is [Music]