- Associated Press - Sunday, January 2, 2011

TRENTON, N.J. | Used to be, if you wanted a knockoff handbag or fake fragrance, Lower Manhattan’s Canal Street was a mecca.

But with flea markets across the country now carrying the same kinds of counterfeit products with poser trademarks, authorities warn that shoppers may get more than they bargain for in poor quality and safety risks while helping fund criminal syndicates in some cases.

“If the price is too good, you have to think about it,” said Lt. Mike McDonnell with the New Jersey State Police cargo theft unit. “If you see it at a flea market and it’s half the price of normal, you have to think there’s something wrong.”

The unit seized more than 5,000 pieces of counterfeit products at a flea market in Springfield, N.J., last month, including fake Estee Lauder and MAC cosmetics that retail for more than $300,000.

Four vendors were arrested on charges of possessing counterfeit trademark items, an offense that can carry jail time if more than 1,000 items are confiscated.

Counterfeit products swarming the market pose health and economic risks, authorities say, and could be financing terrorist organizations. "This isn't a victimless crime," said Robert Barchiesi, president of the International AntiCounterfeiting Coalition. (Associated Press)
Counterfeit products swarming the market pose health and economic risks, authorities say, ... more >

The safety risks of buying fake goods are real, analysts say.

Counterfeit goods, or knockoffs, are different from the cheaper imitation versions found at major retailers such as Wal-Mart or Target, which sell items that follow Consumer Safety Product Commission guidelines.

Fakes usually are smuggled into the country unregulated; nearly 80 percent come from China, U.S. customs officials said.

Safety risks include fake batteries that contain mercury, electrical products that don’t meet safety standards, perfumes found to contain urine and high alcohol content, and clothing made with toxic dyes and flammable materials.

Although cosmetics generally are not subject to pre-market approval, the U.S. Food and Drug Administration restricts the use of certain ingredients and requires warning labels. Legitimate manufacturers can be fined or face other enforcement action if they don’t comply.

If the health risks don’t scare buyers, the economic risks and potential terror funding should, said Robert Barchiesi, president of the International AntiCounterfeiting Coalition.

“You support organized crime, gang activity, and terrorist organizations that use this as a funding mechanism,” he said.

Mr. Barchiesi estimated that the U.S. economy loses at least $200 billion in revenue and 750,000 jobs a year from counterfeit sales.

“This isn’t a victimless crime,” he said.

The sentiment is echoed by local and federal law enforcement, who have been stepping up enforcement of flea markets and other clearinghouses for counterfeits.

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