Aug. 4, 2011 -- You may think of counterfeit goods as being sold on street corners, out of car trunks and at flea markets ... but what about at your local mall?
It's happening, and few can attest to that better than Kris Buckner, a private investigator who specializes in tracking down counterfeit merchandise through his company, Investigative Consultants.
"You can look at us as sort of the 'counterfeit cops,'" Buckner said.
"Nightline" came along as Buckner and police in Orange County, Calif., raided a store allegedly selling counterfeit goods in, of all places, a luxury mall. Police arrested the store manager, who was accused of selling phony luxury brands such as Dior, Prada and Dolce & Gabana merchandise, as well as a huge stash of True Religion jeans, which had been "on sale" at the store for $199.
Buckner works for the brands themselves. In the case of the Orange County bust, Bucker's client was True Religion.
"Anything that the cops do to investigate regular crimes, we're really doing here at our company for those brand owners we represent," Buckner said. "Brand owners don't call 911 to report counterfeiting. That wouldn't be fair. They'd suck the resources of law enforcement."
Investigative Consultants is one of just a few companies around the country that do this special kind of work, and sometimes the brands themselves house their own special units to track counterfeiting.
Protecting More Than Brands
Police say, however, that the damage inflicted by counterfeiting extends beyond the luxury brands whose goods are being duped.
"We notice that several gang members, organized crime and some terrorist groups are associated with distributing, manufacturing counterfeit goods. Now all this money is funding other criminal activities. That's why we're in this," said Sgt. Rick Ishitani, head of the Los Angeles Police Department Economic Crimes Unit. "It's not so much the Rolex, Gucci, the Chanel. They are technically our victims, but the real mission is to take down criminals."
When Buckner brings a case to police, he says he works to ensure it's something worthwhile.
"Our job is to bring them something that they really will evaluate and the hope would be that they will take action. And I will tell you that the majority of the cases we do get prosecuted," he said. "In this economy, we don't want to waste their time."
More Money Than the Drug Trade?
Most of Investigative Consultants' detective work happens at the company's headquarters just outside Los Angeles, where Buckner has a whole team of investigators who are planning operations, mapping out locations and even figuring out their next disguise for undercover operations. A typical assignment for an Investigative Consultants staffer might include donning a wig to go undercover as a customer at a store suspected of selling counterfeit goods.
Buckner, who began his company out of his basement 15 years ago, said business is good. Investigative Consultants, he said, recovered half a million dollars in fake goods last year alone.
Unfortunately, business seems to be good for counterfeiters too. Government officials say seizures of counterfeit goods at the Port of Los Angeles -- the place where the most counterfeit goods come in daily from China -- were up over 40 percent last year. While they're catching as much of it as they can, it doesn't stop the shipments from rolling in. With 14,000 containers coming in each day -- one shipment every seven seconds -- it's hard to catch them all.
"With the volume of freight that we get here in Los Angeles, I believe that the smuggler is pretty sure that if they send 20 containers that a few of them are going to go through," said Chief Guillermina Escobar of U.S. Customs and Border Protection, a port manager at the Port of Los Angeles. "Are we going to catch them all? Maybe, maybe not."
The goods that do make it through port security lead to big paydays for some. After another recent raid, this time at a neighborhood shop in Los Angeles' Santee Alley, police determined the store owner and associates could have been making as much as $500,000 a year selling phony merchandise.
The problem of counterfeiting in the U.S., Buckner said, has grown beyond what anyone can comprehend. He says it generates more money than the drug trade -- more than a billion dollars a year. And though stopping counterfeiters is his bread and butter, Buckner urges consumers to do their part by avoiding buying what they suspect are counterfeit goods.
"The money you're paying in for those counterfeit jeans is filtering back to organized crime, smuggling goods into the country, to the factory employing child labor to work in those unsafe conditions," he said. "If you feel OK with the big picture, then I don't know what to tell you."