Counterfeiting Overview

  • Counterfeiting is the act of fraudulently and illegally creating or manufacturing a product that is intended to replicate an authentic and original product.
  • Counterfeiting is best known to the public in terms of the financial crime of fraudulently producing currency; however, the production of counterfeit consumer products has increased exponentially

Counterfeiting is an Extremely Costly and Dangerous National, International Problem:

  • The FBI estimates that counterfeited goods cost United States’ businesses between $200 and $250 billion yearly.
  • It is estimated that global counterfeiting is valued at approximately $600 billion annually.
  • The profits from counterfeited goods are directly linked to organized crime, as well as terrorism and drug trafficking.

Counterfeit Clothing and Items

Counterfeit clothing and personal items include, but are not limited to:

  • Denim
  • Hats
  • Handbags
  • Watches
  • Shirts
  • Sports jerseys
  • Luggage
  • Shoes and sneakers
  • Sunglasses

Other Forms of Counterfeiting

In addition to counterfeited currency, there is a practically endless list of counterfeited goods and products, including:

  • Documents in general
  • Electronics
  • Compact discs with recordings of all kinds, particularly music
  • Computer software
  • Designer clothing
  • Pharmaceutical products
  • Documents pertaining to lending institutions
  • United States postage stamps
  • Federal documents
  • Official federal seals
  • It is estimated by the Federal Aviation Administration that 2% of airline parts are counterfeit – this equals over 500,000 parts.
  • Counterfeit auto parts include brake linings, transmission fluid and oil filters

Counterfeiting Intellectual Property-Penalties

Counterfeited goods and products involve trademark and patent infringement issues:

  • Counterfeited currency, bonds and other items of monetary value fall under federal jurisdiction.
  • Counterfeiters of goods that illegally utilize registered trademarks may be fined treble damages for profits or damages under the Lanham Act, in addition to attorney’s fees.
  • Penalties vary, including prison sentences of 15, 20 or 25 years per count, and $250,000 + fines.
  • Damages may be assessed up to $1 million per counterfeit mark under 15 USC Sec. 1117 (c) (2).
  • Counterfeiting is considered a crime of such seriousness that in some circumstances it may be considered a crime of treason and the death penalty may apply – although life in prison is generally the maximum penalty.

Defenses to Counterfeiting

Lack of intent to defraud.

  • In cases of poorly created counterfeited currency, the defendant may argue that counterfeiting was not seriously attempted and the items did not qualify because of obvious lack of quality.
  • The defendant may argue that they did not realize the item was counterfeit and that they had no intent to pass counterfeit goods or currency.

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Michael S. Berg
Attorney At Law