US: Inquiry gives insights into counterfeiters’ methods

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Fake products worth several hundred million euros are said to have been smuggled from China to the USA by a counterfeiting network over many years. A lawsuit in New York is now offering insights into the presumed methods of operation and transport of the counterfeiters.

As was now made public, in December 2019, US authorities arrested one of the alleged leaders of a counterfeiting ring that is said to have imported a total of 129 containers of counterfeit shoes into the US. According to charges, the genuine versions of the counterfeits imported into the USA between 2012 and 2016 alone would be worth a total of 472 million US dollars (around 424 million euros).

Authorities became aware of the criminal network as early as 2012 through a seizure in the New York area, according to documents from the United States District Court for the Eastern District of New York. At that time, they stopped a sea freight container from China that was loaded with fake sneakers. By December 2016, Homeland Security Investigation (HSI) officers had confiscated a total of 17 shipments of this type. An unknown number of other shipments may have passed through customs unnoticed.

The deciding clue for taking action against the network was then provided by one of the defendants to the HSI investigators. Being arrested in October 2018, the defendant acted as an informant for the authorities, continued to be active in the counterfeiting network and provided information to the officials. Among this information was a telephone number that allowed them to identify one of the alleged leaders of the organization, who was operating under the alias of “Ray”.

By monitoring the network’s communications, the authorities were informed of several shipments entering the US via the Port of Los Angeles, California and the Port of Newark, New Jersey. In order to traffic the illegal goods into the US, the counterfeiters falsely declared the cargo of the containers, originating from China, as household goods, such as paper napkins and glass vases. On the freight documents they used the names and email addresses of legitimate Chinese and US companies. For the email addresses, they registered a new domain in advance, which differed from the actual company domains by only a few letters; the telephone numbers given led to prepaid mobile phones of the counterfeiting ring.

During inspections of the shipments, counterfeit Nike and Louis Vuitton shoes were found hidden behind two rows of generic shoes. HSI investigators took a small number of the counterfeits as evidence, but allowed the containers to pass in order to identify their destinations. The shipments were headed for various self-storage warehouses in the New York City area; contrary to what was indicated on the papers. There, the shipments were divided into smaller consignments and sent on for sale.

The main suspect “Ray” was arrested during a trip to the US on 27 December 2019 at Dulles Airport, near Wahington, DC, and charges were filed against him.

Sources: Eastern District of New York, Quartz

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