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U.S. Officials Chase Counterfeit Goods Online

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ICE, Customs Agents Police a Global Trade That Has Shifted From Ports to E-Commerce



A counterfeit Coach handbag displayed by ICE officials on Friday.ENLARGE

A counterfeit Coach handbag displayed by ICE officials on Friday. Patrick T. Fallon for The Wall Street Journal

Nov. 28, 2014

LONG BEACH, Calif.—Friday was one of the biggest shopping days of the year, but U.S. Immigration and Customs Enforcement agents here have other plans for the holiday season.

Over the next few weeks, the agency is ratcheting up efforts to track down and confiscate millions of dollars’ worth of gift-friendly goods before they can reach store shelves or the doorsteps of online shoppers.

The holidays are a popular time for knock-off sales—everything from headphones and electronics to sports jerseys, jewelry, handbags and toys. Shoppers, especially on Black Friday, are looking for deals. And often, as long as it looks real, many admit they will go with the more budget-friendly option.

But ICE and U.S. Customs and Border Protection are prepared to crack down on that trade, coordinating an increased number of enforcement actions. “It’s hugely important because of the dollar loss that’s experienced by industry and by the U.S. in general” in tax revenue, Special Agent in Charge Claude Arnold said Friday.

In each of the last three years, federal agents have seized counterfeit goods with a retail value totaling well over $1 billion. A vast majority of those goods come from China and Southeast Asia, commonly arriving on U.S. shores at the ports of Los Angeles and Long Beach, according to ICE’s Homeland Security Investigations branch.

But increasingly, the counterfeit market has been going online, where it can be easier to trick buyers with slick websites and photographs copied from genuine retailers. Many of those goods no longer come in through the ports, where Customs agents might intercept them. Instead, they are being shipped directly to consumers.

UGG boots, for example, have many online imposters, says Graham Thatcher of Southern California-based Deckers Outdoor Corp. , which owns the brand. Deckers has managed to shut down more than 60,000 websites selling knock-off versions of its familiar fur-lined UGG boots. But the fakes are still out there, and because UGGs are such a popular gift, the holiday shopping season is one of the primary times of year that people get duped.

“Those are some of the saddest stories,” said Mr. Thatcher, a brand-protection associate. “People will have saved up to buy them, primarily for their daughters, and on Christmas they open them up and right away they know they’re fake,” he said. “It’s really sad.”

In response, UGG created a service on its website where consumers can enter the address of the website where they are shopping, and UGG will tell them whether it’s an authentic retailer or not.

While online sales have become popular for counterfeit vendors, there are still storefront operations in places like Santee Alley, in downtown Los Angeles, agents said. On Friday morning, hundreds of discount vendors there were rolling up their metal gates and setting out mannequins and other displays, spilling out of their stalls into the narrow street.

Ellie Rivera, a 24-year-old employee at Betty Shoes, said Black Friday tends to be busy even though not many of the retailers in the area offer specials. Prices in the Santee Alley shopping district are already highly discounted. “They just want to shop because it’s Black Friday,” she said.

Ms. Rivera said her store sells Chinese-made women’s shoes, but no knock-offs. “Everyone knows there’s undercover police” in the area, she said.

Mr. Arnold of ICE says local law enforcement still conducts storefront checks, but the real threat these days is online. And while he admits that his job is to remove many of the season’s most popular gifts from the market, Mr. Arnold says his agency is no Grinch.

“If we are,” he said, “we wear that label with a badge of honor.”


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