THE
KESSLER REPORT Continued A Publication of Michael G. Kessler and Associates, Ltd. ArchiveHome
FraudBusters®
Edition
Volume 1
Number 1
KESSLER'S CORNER
At Kessler &
Associates, we understand that one of the most precious commodities
in any business is information, and that's why we publish this
newsletter-to help keep you informed. Starting with this issue, we
have decided to change the style of our newsletter to better reflect
our commitment to sharing information with you. Each newsletter will
have a theme, and will highlight the latest information available on
the topic selected. This newsletter focuses on Counterfeiting and
Diversion, two serious crimes that affect a greater number of
businesses each year. We have included a range of material for you
to look over, from recent legal changes to cutting-edge technology,
and
hope you find it both interesting and helpful.
Each newsletter will feature a
question and answer section, addressing the concerns that many of
our clients share. We encourage you to send us any questions you may
have regarding white collar crimes, and will attempt to include them
in future newsletters. If you like the changes we are making, or
would like to see other changes made, please let us know. After all,
we are publishing this newsletter for you. You can
or call our offices at (800) 932-2221.
Sincerely,
Michael G. Kessler
Q
& A
I
recently saw a pair of designer sunglasses for sale on the street
for $10, and I know they would cost over $100 in stores. What's the
harm in buying them?
We all like to get good deals, and sometimes it seems that
counterfeit or stolen goods (the sunglasses could have been either)
are the best deals possible. But there is a big difference between
where your money goes when you buy counterfeit or stolen goods
versus legitimate goods. With a legitimate purchase, your money goes
to the retailer, the manufacturer, and the government (in taxes). It
helps pay employees, covers overhead, and funds various local and
national programs.
When you buy counterfeit or stolen goods,
your money usually ends up in the pockets of organized crime
syndicates, which fund an array of illegal activities, including
drug proliferation and terrorist activities. A current investigation
is exploring the ties between counterfeiting operations and the
World Trade Center bombing. If you keep in mind where your money is
going to go and what could happen as a result, you may not think the
deal is so great.
I am learning about diversion as a
crime, and wondered what legal charges are brought against
diverters?
We asked
two lawyers, both expert in diversion cases, to share their
experiences.
Rodney Brown, of Brown & Fox in
New York City, responded:
"We have brought legal actions
against diverters based on common law fraud, breach of contract, and
related theories. Where product has not been disposed of by
diverters, we have been able to obtain injunctions permitting the
seizure of the product. We have generally brought our actions in
federal court, and in our experience, federal judges [understand]...
the damage caused by illicit product diversion."
Donald deKieffer, of deKieffer &
Horgan in Washington, DC, gave the following response:
"There are a number of legal
recourses to diversion, but the
availability of these remedies depends substantially
upon the efforts of the victim to protect himself...Companies should
have policies which encourage sales personnel to question the bona
fides of customers, particularly in unfamiliar markets. Failure to
use due caring in "vetting" customers can not only result
in huge losses, but diminish the chances of recovery as well. Part
of the programs companies should adopt include checking data about
suspect customers with databases such as those maintained by Mr.
Kessler."
I'm in the cosmetics industry, and
our company often subcontracts production to outside factories. How
do I know if they are legitimate, or if they have ties to
counterfeiters?
It's important to do due diligence in
these cases, and a trained investigative firm can help. A credible
firm will conduct a thorough investigation of any agents, brokers,
or subcontractors you are considering, making sure that they are
reputable businesses free of unethical practices.
Trademarks can Make the Web a Sticky
Place
It makes sense that a Web site would
be good for business-the more familiar a potential customer is with
your name, the more likely he or she is to buy your product. A Web
site is like a 24-hour storefront, where customers can learn more
about a company and its products. Even old-school executives now
think in terms of Web presence and talk about links and daily hits.
The Web has become the place to be seen.
Of course, the more a company is
seen, the more vulnerable it is to trademark infringement, and this
is just as true in "cyberspace" as it is on the street.
But on the Internet it's even easier to pass off unauthorized
trademark use as legitimate.
To address this problem, Kessler
& Associates performs WebSweeps to determine if a client's
trademark is being used without proper authorization. Our WebSweep
Program enables a business to strongly promote itself on the Web
with a reduced risk of trademark infringement.
Kessler International... Because There Is A Difference.®
Kessler International
World Headquarters
45 Rockefeller Plaza - Suite 2000
New York, NY 10111-2000
Phone: (212) 286-9100 Fax: (212) 730-2433
Toll-Free Phone: (800) 932-2221 Toll-Free Fax: (800) 451-4546
