Government Targets Counterfeit Commerce

The table in the offices of the Immigration and Customs Enforcement agency was piled high with purses, electrical appliances, gleaming watches and popular video games -- a holiday gift jackpot.

But the merchandise wasn’t for sale. Seized from illegal traffickers last month in Houston and New York, the goods -- worth about $8 million -- were from the thriving, $200-billion-a-year counterfeit industry that officials say floods the market with illegal and often faulty products that put consumers at risk and undermine the economy.

“Counterfeit items are ... untested, unregulated, [and] often manufactured by criminal enterprises,” Michael J. Garcia, the assistant secretary of Homeland Security who heads ICE, said at a news conference Thursday. “Profits from counterfeit products do not go into the economy but into the pockets of organized crime.”

Counterfeit merchandise -- ranging from knockoff apparel often sold on street corners and in flea markets to medications obtainable without a prescription from online drugstores and pharmacies abroad -- is widely available in part because of the irresistible appeal to consumers of getting reproductions of normally high-priced items for a fraction of the cost, officials said.

The value of confiscated counterfeit goods has been on the rise in recent years, government figures show. Two years ago, the items seized were worth more than $57 million; last year the value for roughly the same collection of merchandise was more than $98 million. The figures through March of this year -- the most recent available -- indicate that nearly $38 million in illegal merchandise was seized.

The problem can be deadly. In 1999, 80 people were killed and 6,700 fires started because of defective electrical cords, said Hal Stratton, chairman of the Consumer Product Safety Commission. Between 1994 and 2000, 58 people were electrocuted by malfunctioning extension cords, he said.

In a video shown at Thursday’s news conference, officials from Underwriters Laboratories Inc., an independent safety testing lab, demonstrated how a substandard power cord used for ordinary purposes began smoking and burst into flame within 15 minutes. In another segment, an extension cord’s plastic casing melted and oozed over a carpet within 24 hours.

One official recalled a case involving a suspect who was arrested in Thailand after he allegedly cooked up a hodgepodge of ingredients to form pills that were sold as Viagra to U.S. customers who placed orders on the Internet.

“Think about what you’re bringing into your home,” Garcia said. “When you engage [in buying counterfeit products], you’re supporting a criminal enterprise.”

Cigarettes topped the list of commodities moved on the black market last year, representing 38% of counterfeit items seized by officials in the United States. Bootleg computer software and pirated movies and music followed at 29%, according to figures from the Department of Homeland Security. Last year, 83% of counterfeit merchandise came from China.

Officials said it might be easy for consumers to look the other way when buying counterfeit items such as sunglasses and wallets. However, they should be particularly wary when buying electrical items, such as power cords, lamps and Christmas tree lights because of the potential risk of injury or death from defective items, officials added.

Electrical items that meet safety standards and have undergone testing by reputable certification labs bear quality and safety assurance labels. Counterfeit electrical items -- usually power strips and extension cords -- often carry fraudulent safety lab labels and are often abundant in discount stores.

Consumers may be able to tell the difference by paying attention to packaging. If a product is shabbily packaged, has a safety mark on the carton but not on the product itself, or lacks a company or manufacturer’s name, the item may be counterfeit.

“These products can and will kill you. They can and will burn your children horribly,” said John Verscaj, general counsel for Underwriters Laboratories. “If the product appears too good to be true, it probably is.”