For holiday shoppers, those brand-name purses and clothes that go for $400 at a department store may seem like a bargain when peddled as $40 knockoffs on the street – but they take billions of dollars out of the economy and cost thousands of jobs, authorities said Tuesday in vowing a crackdown on counterfeiters.
As a result of a six-month investigation titled Operation Bell Bottoms II, authorities in November arrested 10 people, and seized $446,000 in counterfeit goods and $23,000 in cash.
Four were charged Monday, including two men who are suspected of trying to sell fake designer watches to undercover cops.
Another woman was charged with seven counts of counterfeit merchandise and one count of false imprisonment, which stemmed from her allegedly locking the doors to her store when she heard police coming and refusing to let a customer out.
The four face a combined total of $4 million in fines and 14 years in jail.
Counterfeiters, who don’t pay sales taxes, cost the retail industry $2 billion in losses and $5.2 billion in overall lost revenue to L.A. County in 2005, according to the L.A. County Economic Development Corp.
Internet piracy and movie bootlegs have caused the loss of 106,000 jobs across nine sectors, for a total of $4.4billion in lost wages annually in L.A. alone, according to the LAEDC.
“The crime of counterfeiting and piracy exposes consumers not only to health and safety risks,” City Attorney Carmen Trutanich said, “but it also impacts legitimate businesses, employment, and believe it or not, public safety.”
In one bust, authorities found cartons of fake Marlboro cigarettes that were virtually indistinguishable from the real thing. While some counterfeiters fake the tax stamp on legitimate cigarettes so they can avoid paying money to the state, these cigarettes were bogus, authorities said.
Other fake merchandise seized in the raids included Louis Vuitton and Coach handbags and caps, Prada and Oakley sunglasses, Rolex watches, and T-shirts with trademarked characters such as Angry Birds.
Bootleg DVDs and albums were also a common find, and included movies that were still in theaters or weren’t due to hit the big screen for another month, such as “J. Edgar” and “The Adventures of Tintin.”
“It’s too new to be true,” said Larry Hahn of the Motion Picture Association of America. “Piracy is not a victimless crime. It threatens the jobs of millions of Americans.”
The music industry has lost $7.6 billion in revenue and 15,000 jobs in the last decade due to piracy, according to the Recording Industry Association of America.
While fake goods have also been found in the San Fernando Valley, the majority is concentrated in the Fashion District downtown, with Santee Alley being a hot spot for counterfeiters, officials said.
Meanwhile, with permission of the trademark owners, confiscated items will be given to homeless shelters.
