Counterfeiting is the imitation of brand name merchandise created to deceive the public into believing it is authentic.  In the case of t-shirts often the greatest damage reverts to the manufacturers in lost profits or even the buyer in purchasing sub standard merchandise, but in other areas the results of counterfeiting can be much more dangerous and in some cases even deadly.  

Prescription drug counterfeiting has been responsible for numerous deaths throughout the world, whether it be from poisonous ingredients added to the medication, or simply placebos replacing the necessary medication to keep the user alive.  As recent as July of this year companies in Florida, Nevada and New York were caught distributing counterfeit cancer, Aids and dermatology prescription drugs to drug stores nationwide yet these multi-million dollar U S companies were not prosecuted.  Companies in Ohio, New York and Florida were found distributing counterfeit food products yet they were never prosecuted. And the track records for this type of activity by these companies goes back to the 1980’s. Could it because these companies are major political fundraisers? One of these companies even held a fundraiser for a presidential candidate in the home of its president.

The hit to our economy is devastating as well, with counterfeiting costing over 200 billion dollars in lost revenue per year.  When all of these factors are weighed, it should cause second thoughts before consideration is given to purchasing counterfeit items.  Most often the buyer is naive in the purchase or perhaps tricked into believing that the item is authentic.  However, there are certain red flags that should be apparent to the average consumer. Michael G. Kessler, of Kessler International, suggests the following ways to help consumers avoid purchasing counterfeit products:

·        If an item is significantly less expensive than previously found, suspicions must be raised as to the authenticity of the item.  Often individuals who cannot afford the real product will knowingly purchase counterfeit items if they feel they look enough like the actual item to appear authentic.  This is an obvious support of counterfeiting and serves to help line the pockets of terrorists who may be scheming towards their next attack on innocent Americans. 

·        Swap meets, flea markets and street stands are not likely the distribution network of legitimate manufacturers.  Purchases of these products should take place in store locations and not street stands.

·        Examine product labels thoroughly.  The misspelling of brand names, or exceptionally small or photocopied logos, are attempts to trick the purchaser into assuming the product is authentic even though the logo may be hard to distinguish.

But what about Biological Warfare?

A major consideration should be made when purchasing items of questionable authenticity.  With all of the reports of Anthrax being circulated in the past few weeks we are quite conscious of the threat of biological warfare, of which we could easily fall prey.  What better way to spread such plagues, but with the use of products that Americans feel safe purchasing and using.  Name brand food products tainted with small doses of Anthrax or other deadly bacteria could kill hundreds of thousands of individuals.   Consider the Tylenol deaths in Illinois in the 1980’s and the number of lives lost due to a relatively small amount of poison. Today this threat is even greater and could easily be achieved with the use of counterfeit food or drug items being laced with deadly poison. Biological attacks of this nature are surprisingly easy to mastermind.  It takes a small amount of these toxins to poison large populations.  For example 2 kilos of botulism, anthrax, or E. Coli if added to the water system, food distribution system or large lot of digestible food products could infect 200,000- 300,000 individuals. 

Diversion Funds Terrorist Activity

Counterfeiting is not the only tool of terrorists; Diversion has also been linked to terrorist activity.  What exactly is diversion and how could terrorists profit from it?  Diversion is simply the redistribution of products, which were originally targeted for another location or country.  In simple terms, a company will discount their products to certain parts of the world, or even within the country, where the economy is sluggish and unable to meet the price that the goods could command in more prosperous areas.  So, for instance a shipload of soup may be sold in the U.S. for $24.00 a case to a major supermarket chain and the same quantity may be sold in another country for $14.00 per case.  If the case earmarked for the foreign locale was then shipped back to the U.S., and sold to the same major supermarket chain for $20.00 per case the supermarket would net more profit on the item and the diverters would profit as well from the money made selling the shipment to them.  In a single case scenario the profit seems small, but consider this on a large scale and it is easy to see how much profit could end up in criminal hands when practicing diversion tactics.  

Diversion is big business in this country and sadly enough is practiced not only by terrorist activity organizations, but often by multi-million dollar companies.  It is a murky business that can involve kickbacks and fraud.  Some diverters may even maintain diverting desks secretly in buying offices of legitimate wholesalers and supermarket chains.  Many of these include recognizable wholesalers who have had cases brought against them, but in most instances were never prosecuted.  

Why would such criminal activity go unpunished?  There are several schools of thought on this issue, but the primary one which continually comes to light is that often these large organizations who distribute diverted products on a daily basis are also major contributors to political campaigns in this country and as a result have legislators in their back pockets. Kessler International has documented proof that some of our current Congressman, Senators and top Washington officials have received political contributions from the companies that distribute counterfeit and diverted merchandise.

Anonymity is also major factor in the perpetuation of counterfeit and diversion activity.  Some law firms are working with these diverters and counterfeiters using holes in the U S Customs regulations to prevent publication of the name of the company importing counterfeit and diverted merchandise.  By allowing this anonymity to exist we are often becoming victims to the same parties who have previously been charged with these offenses.  Keeping their identities secret is in fact encouraging them to continue their illegal activity.

Diversion & Biological Warfare 

Certainly not all diverters or counterfeiters are foreign terrorist groups, but consider the following. One of the first steps diverters take when diverting a shipment is to remove the batch codes or lot numbers from the merchandise slated for diversion.  The lot numbers and batch codes are the ways in which the manufacturer and the federal government can track and locate tainted products within the country.  If a case of food or drugs turns up in Iowa, where poison has been added to a certain product, authorities can announce the lot number of that item and have all purchasers of this brand item across the country remove all products bearing this code.  If the codes have been removed and a lot of food is tainted with poison or bacteria of some kind, products without these codes cannot be relocated and as a result deaths, which may have been avoided, are now imminent.

The activities of counterfeiting and diversion also provide a source of money laundering to criminal factions, whether they are terrorist groups, underworld organizations, or criminal parties.  Considering all of the evidence against counterfeiting and diversion it still remains an extremely costly problem for our nation.

Diversion unfortunately is a big business in the US and is estimated to involve approximately 500 billion dollars in lost revenues to the manufacturers per year.  With little legislation to counter diversion and package tampering and nominal penalties to those charged, it is unlikely that the problem of diversion will be solved anytime soon.

However, when the link to terrorist activity has been made it is hopeful that the effect may be to curtail these activities in light of the magnitude of harm that can be leveled against our nation as a result of such practices.  

Evidence of Terrorist Links

Direct links have been made to terrorist activities both in this country and throughout the world.  Consider the following facts:

·        Counterfeit and Diversion investigations conducted by Kessler International have linked the sale of products to terrorist organizations in Pakistan, Columbia and individuals linked to the Oklahoma City Bombing.

According to Roslyn A. Mazer, former Associate Deputy Attorney General in the Department of Justice, who led initiatives to combat piracy and counterfeiting and wrote about them recently in a recent article:

·        According to 1995, testimony before the Senate Judiciary Committee, New York’s Joint Terrorist Task Force had reason to believe that high-level players who controlled a counterfeit T-shirt ring were using the proceeds to support terrorist groups such as the one that bombed the World Trade Center in 1993. 

·        Last December, several news organizations reported that trademark pirates based in Pakistan were filing orders from Afghanistan to produce t-shirts bearing counterfeit Nike logos and glorifying bin laden as "The great mujahid (holy warrior) of Islam."

·        Last year, in the notorious piracy haven of Ciudad del Este, Paraguay, a naturalized Paraguayan citizen born in Lebanon, was charged with selling millions of dollars of counterfeit software, the proceeds from which he allegedly funneled to the militant Islamic group Hezbollah in Lebanon.  He fled to Paris.  FBI agents and their counterparts from several countries are now pursuing rumored links between groups within the city’s 12,000-member Arab community and the September 11^th attacks.

These are but a few of the many pieces of evidence that have been found to link counterfeit and diversion activities to terrorism.  With major corporations profiting from these practices in this country, by way of diversionary profits, and government officials profiting through contributions from these same corporations, we are faced with a major problem in this country.  More importantly we may be faced with a moral dilemma should these terrorists decide to act once again and perpetrate an act of terrorism against our homeland.  If our politicians continue to support these activities, or at the least do nothing to fight for legislation against such activity, we may find the finger of blame pointing at us.

 The Solution

The events of September 11^th left most Americans feeling vulnerable and helpless.  Many of us asking what we can do to help America regain its strength and prevent further vulnerability. One answer seems to become apparent.  If we take away the means of support of these terrorist groups we will be greatly reducing their ability to harm us once again. 

There are of course radical extremist groups which if determined to wreak havoc on our nation may find a way to do so even if handcuffed by monetary limitations.  However, if Americans want to help curb the possibility of future acts of terrorism against our country we must avoid aiding any industry which has ties to such activity. 

Counterfeiting and Diversion are proven sources of funding and we must therefore pay close attention to impending legislation and the politicians that oppose it so that we can stop these practices in our country.

For more information about Kessler International or for detailed information about product counterfeiting and diversion contact Michael G. Kessler at 212-286-9100 or visit their website at www.investigation.com