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Looking for holiday bargains? Beware of counterfeit goods

'Tis the season for deception, fakery and fraud.

Whether it's online or at your corner store, there's no shortage of illegitimate retailers trying to reach into your wallet and fool you this holiday season.

The goods they're selling range from high-priced watches and sunglasses to designer clothes and footwear, and they are always cheaper, often considerably cheaper, than the same product somewhere else.

And there's a good reason why. They're counterfeit.

'The fakes out there are so good, legitimate consumers are being fooled," said James C. Spero, special agent in charge of the Buffalo office of Immigration and Customs Enforcement, Homeland Security Investigations. "If there's a hot holiday item, counterfeits will try to copy it."

Gone are the day when sneakers, caps and hand bags dominated the counterfeit scene. Now, you can buy fake versions of Viagra, Cialis and a host of other lifestyle drugs. You can even buy a counterfeit air bag for your car.

"It's more than hats and jerseys," said Spero. "Almost anything you can sell legitimately can be copied and sold illegally."

Investigators know from experience that counterfeiters come out in force during the holidays. What better time of the year to prey on unsuspecting consumers.

They also know bargains are a sought after prize and that the lure of a discounted price can deceive even the savviest of shoppers.

With that in mind, the message is – be on guard.

Nowhere is the presence of fake goods and products more prevalent than on the web and, lately, it's not just the goods that are frauds. So are the websites, many of them mirror images of the websites used by legitimate retailers.

James C. Spero, special agent in charge of Homeland Security Investigations Buffalo, displays some of the counterfeit items at the office in Buffalo Thursday, December 8, 2016.    (Mark Mulville/The Buffalo News)

James C. Spero, special agent in charge of Homeland Security Investigations Buffalo, displays some of the counterfeit items at the office in Buffalo Thursday, December 8, 2016. (Mark Mulville/The Buffalo News)

"When you're online, you don't know who's on the other end unless you do your due diligence," said Melanie McGovern, spokeswoman for the Better Business Bureau of Upstate New York.

These new "copycat" websites are the latest wrinkle in an underground industry that, according to law enforcement estimates, makes up 2.5 percent of global trade and costs companies here and across the world more $700 billion a year.

One of the consequences of the rapid increase in online counterfeiting is the government's reaction to it – a campaign by Immigration and Customs Enforcement to shut down the websites behind the illegal activity.

In Buffalo, that campaign has targeted, among others, sites that sell knockoff sports products with local brand names, most notably New Era Cap merchandise. In the past, the company has estimated its loss from counterfeit caps at about $300 million.

At New Era's urging, the U.S. Trade Representative’s Office has communicated its concerns about knockoff caps to high-level Chinese government officials. Federal investigators says China is responsible for about 63 percent of the counterfeit goods that come into the U.S.

In most cases, the fake goods finding their way here sell for prices far below the market rate for those products. Consumer advocates say that's the first warning sign shoppers should look for.

"If it seems a little too cheap, there's probably a reason why," said McGovern.

She said another red flag is improper grammar or incorrect spellings on a website. At one of the New Era knockoff sites, the brand was listed as “New Ear.”

Experts also suggest researching the retailer you're buying from and using model and serial numbers to ensure the product they're selling is legitimate. They also recommend avoiding websites that are not secure or do not list a contact telephone number.

And finally, Spero offers one other piece of advice.

"Trust your gut," he says.

In other words, if the deal sounds too good to be true, avoid it.

For some consumers, buying a fake can be viewed as a bargain, and investigators know there are buyers who willingly buy a knock-off watch or purse.

"There are people who buy counterfeit goods and don't care," said Spero. "But there are consequences."

Spero will be the first one to tell you it's not a victimless crime and that, given the volume of fake goods coming into the country, the impact on U.S. manufacturers and employees can be substantial.

He also wants shoppers to understand that organized crime organizations are often behind counterfeiting. He says there's also evidence that some terrorist groups may be profiting from the same type of illegal activity.

While big ticket items like smart phones, tablets and DVD players remain popular choices for counterfeiters, the realm of fake goods and products has exploded in recent years.

Perhaps, the best evidence of that increased presence was the local prosecution of Ryan Breen, a 33-year old upstate man who trafficked in counterfeit "Sons of Anarchy" products. Investigators say Breen operated several websites marketing knockoff T-shirts and other goods, and sold more than $75,000 worth of items that infringed on the TV show's trademark.

Even more bizarre, perhaps, is the more recent local prosecution of two men, one here, one in China, accused of selling counterfeit air bags.

Raymond Whelan, 47, of Cheektowaga, is accused of selling 403 fake air bags for a total of $156,051. ICE investigators say Whelan sold the bags on eBay for about $395 a piece and relied on David Nichols, 66, an American living in China, as his source for the fake bags.

According to court records, Whelan and Nichols were caught on tape talking about the counterfeit bags and their role as "life-saving devices."

"I have assembled one with their instruction and it just may work," Whelan is alleged to have told Nichols. "I can't see why it wouldn't but...I'm not an air bag expert."

Investigators say air bags and Sons of Anarchy T-shirts represent just a sampling of the fake goods available online and at local stores, flea markets and gas stations.

At several local stores, they found fake Northface hats for $10. They also bought a counterfeit "E.J. Manuel" Buffalo Bills jersey for $45, about a third of the market rate for a real Manuel jersey.

McGovern said the BBB is even starting to see fake concert and sporting event tickets online.

Add in the holiday season and the shopping frenzy it creates and you have what Spero would consider an environment ripe for criminals.

"We know everyone is going to be shopping and looking for a bargain," he said. "We also know whenever there's an increase in shopping, we also see an uptick in counterfeit goods being sold."

Be aware and do your homework, the experts say, and chances are good you'll remain a consumer, and not a victim.

 

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