The sight was a strange one. Piles of designer logo bags – luxury items toted by celebrities and retailing for thousands of dollars apiece – were laid out on tables, displayed in the most un-luxurious of settings, the rear parking lot of the Town of Poughkeepsie Police Department. Trash bags filled with the loot – Nike shoes, Luis Vuitton luggage, Chanel and Coach handbags, DVDs of popular movie titles – spilled out of vans with heavy-duty locks. All told, the goods would have been worth more than $300,000.
That is, had the items been authentic.
Town police busted five New York City-based merchants for allegedly selling the counterfeit goods at a flea market at 900 Dutchess Turnpike, the Dutchess BOCES BETA campus. Three vans were seized along with 850 counterfeit DVDs – copies of movies distributed by Sony, Disney, Columbia and Warner Bros. – fake designer handbags, wallets, luggage and other accessories from companies such as Louis Vuitton, Fedi, Christian Dior, Chanel and Burberry.
The defendants were all charged with trademark counterfeiting in the first degree – a C felony punishable with up to 15 years in prison if convicted – and three defendants were also charged with second degree counterfeiting, an E felony punishable with up to four years. All defendants were arraigned to the Dutchess County Jail in lieu of $100,000 bail.
Representatives for the high-end labels complained to the police with reports of counterfeit versions of their goods sold at the Dutchess flea market. The operators of the flea market, American Premier Market, are not facing criminal charges.
The International Chamber of Commerce reports that trademark counterfeiting and copyright piracy account for between five and seven percent of world trade. Some forms of counterfeiting are obviously more harmful to consumers than others. The ICC reports that in 2001, counterfeits of Serostim, an AIDS treatment drug, were discovered circulating in California, Ohio, Kentucky, Michigan, New Jersey, Florida and Missouri. Fake versions of the drug Nutropin, manufactured by Genetech Inc., reportedly posed a serious health risk to those who took the drug.
It is not likely that those buying the fake Coach handbags, which retail at $300 or more, or the Luis Vuitton luggage, which retails for close to $2,000, thought they were getting the real deal at the flea market. Det Capt. Paul Lecomte did not know what the bags were selling for at the flea market, but counterfeits typically sell for a small fraction of the retail price and are often made with fake leather.
In New York City’s Chinatown, a destination for many counterfeit handbags, constant wars rage between vendors, who operate out of small stores brimming with fake goods, and undercover private detectives working for the designer labels.
But owners of trademarks and advocates like the International Trademark Association (INTA) argue that trademark counterfeiting, even when it doesn’t overtly harm the consumer, result in lost tax and customs revenues to nations and lost profits for companies that own trademarks.