Counterfeit Goods: Crime Inc.-The Underground Economy

A look into the largest underground industry-counterfeit goods.


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Fake handbags, watches, shoes, perfumes—the business of counterfeit products is the largest underground industry in the world, generating hundreds of billions of dollars for the perpetrators while sapping the economy, putting lives in jeopardy, and funding organized crime in the process.

This program reports on what has become a global crime spree, in which goods are produced and consumed in a world of high risk and high reward. Viewers discover the challenge of effective port inspections, accompany an LAPD anticounterfeiting unit on raids, and enter backroom factories where forged items are produced. Also profiled: a company whose entire brand was copied and a defense contractor whose counterfeit parts found their way into Iraqi weapons depots.

Video Segments

1. Counterfeit Goods: Overview Ports, borders, and even in cyberspace, the U.S. is under siege by a flood of counterfeit goods. This costs American businesses $250 billion a year and costs workers 750,000 jobs.
2. Reason for Counterfeit Boom Today, just about anything a person can buy could be a cheap or deadly counterfeit--from clothes to medicine to military equipment. Overseas manufacturing, the global economy, and the Internet have created the perfect environment for counterfeiters to make and ship illegal products.
3. Health and Safety Risks Counterfeiting leaches money from almost every part of the U.S. economy, and as a result, jobs are cut. Most counterfeit products come from China. Fakes can carry serious health and safety risks.
4. LAPD Sting Operation Undercover agents carry concealed video equipment because only hard evidence will convict counterfeiters. Follow along as LAPD sets up a sting to catch a counterfeiter.
5. Police Nab Counterfeiter LAPD officers find an "impressive stash" of counterfeit goods in a warehouse. The counterfeiter is arrested. They uncover $200,000 worth of illegal goods.
6. Counterfeit Goods Enter America Around 60,000 containers arrive on American shores every day, carrying goods that are often counterfeits. In 2000, $47 million worth of counterfeit goods were seized. In 2009, the figure was $261 million. Officers hand-inspect suspicious imports.
7. Warehouses Filled with Counterfeit Goods In warehouses filled with shipments that have been identified as counterfeit, goods are stacked three stories high. These warehouses are found across the United States.
8. Adaptations by Counterfeiters Counterfeiters look for ways to adapt to new methods used to discover and confiscate their goods. One way is to send smaller shipments by express mail. The Internet gives counterfeiters a 21st-century way to do business.
9. Counterfeits: Funding Terrorism Counterfeiting is the most lucrative crime in the world. Counterfeit goods could destabilize our national security. Measures to stop terrorist groups may have pushed these people into the most lucrative business of all: counterfeiting. The primary counterfeits are cigarettes.
10. Counterfeits in Military Supply Chain Substandard equipment in the military could cause serious harm to humans and machinery. Counterfeit O-rings and engine seals were uncovered in military parts depots in Iraq in 2003.
11. Medicines: Lethal Counterfeits Counterfeit cough syrup and baby formula have killed thousands worldwide. Pfizer Inc. has thousands upon thousands of files representing individual cases of counterfeit Pfizer products. Over 11 million dosages f Pfizer counterfeits were seized in one year.
12. Near Fatal Botox Treatments A doctor and his wife were injected with counterfeit Botox-- but it was the raw neurotoxin that causes botulism. The doctor who injected them had concocted it himself; he was later convicted of passing a misbranded drug.
13. Disfiguring Effects of Counterfeit Injectable Cosmetic Treatments Fake Botox and Restylane in one Seattle salon resulted in permanent disfigurement. Patients take their lives in their own hands when they go online for deals on medicines. According to WHO, over half of drugs from unregistered online pharmacies are counterfeit.
14. Counterfeit Shoes Shoes are the most counterfeited products today. These illegal copies cost shoe manufacturers more than $12 billion per year. Counterfeiters tried to create a total image of New Balance shoes, right down to shipping cartons and bags.
15. Theft of Intellectual Property The science behind a genuine product is known as intellectual property. The scam was uncovered by an American PI in Beijing. New Balance took the counterfeiters to Chinese court, but the court sided with the counterfeiters.
16. New Balance Gets Conviction After New Balance relentlessly pursued counterfeiters and finally got a conviction, the company was no longer a target for counterfeiters. Recently, however, another New Balance counterfeit group has started the scam again.
17. Worldwide Counterfeiting: Can It Be Stopped? LAPD anti-piracy unit is launching a new strike against a counterfeit operation. In the sting, counterfeiters are selling bogus Tiffany jewelry. Officers capture $400,000 worth of counterfeits. Yet, this is a small dent in the worldwide counterfeit machine.
18. Consumer Demand for Counterfeit Goods In the past, much of the blame for counterfeiting has fallen on China. The problem, however, is the great worldwide demand for counterfeit goods. Tougher penalties for counterfeiters are needed. Shoppers crave cheap designer look-alikes.



Grade: 9-12

Counterfeit Goods: Crime Inc.-The Underground Economy (DVD)
© 2011
Time: 44 Minutes

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