Original subtitles

NARRATOR: COUNTERFEITING IS A GIANT GLOBAL TRADE.

MAN: IPHONE 6...NEW MODEL.

NARRATOR: ANYTHING AND EVERYTHING CAN BE FAKED.

ABU: WE HAVE GUCCI IN THERE.

WE HAVE SOME BIG NAME IN THERE.

NARRATOR: THE ENTERPRISE IS BREATH TAKING.

RICHARD ACEVEDO: THEY'RE SELLING THESE WATCHES ON

EBAY AS THE REAL THING.

NARRATOR: THERE'S NO SINGLE MARKET.

RICHARD ACEVEDO: LITERALLY THESE BOXES ARE FROM ALL

FOUR CORNERS OF THE PLANET.

NARRATOR: NO SINGLE POINT OF ENTRY.

RICHARD ACEVEDO: CHINA... JAPAN... EUROPE...ASIA.

NARRATOR: EVERY CRACKDOWN DRIVES FAKERS TO EVER

GREATER LEVELS OF CUNNING.

TOMMY VUITON: COUNTERFEITS HAVE BEEN HERE FOREVER.

SINCE 9/11 CUSTOMS STOPPED A LOT OF SHIT AND RIGHT NOW

ESPECIALLY BOOTLEG SHIT THEY TRYING TO STOP IT

BECAUSE THE STORES WERE COMPLAINING.

BUT FUCK THEM STORES.

I GOTTA GET MONEY.

WE GET MONEY.

WE SOME MONEY GETTING MOTHERFUCKERS OVER HERE.

NARRATOR: TOMMY VUITON CONSIDERS HIMSELF A

KNOCK OFF ENTREPRENEUR.

TOMMY VUITON: WE GOT EVERY MOTHERFUCKING THING

A NIGGA NEED.

LOUIS...GUCCI...FERRAGAMO.

WHATEVER YOU WANT I HAVE IT.

WHATEVER YOU NEED, NIGGAS, YOU COME RIGHT HERE.

I PICK IT UP...

YOU COME GET IT... GOT YOUR MONEY RIGHT...

I GIVE IT TO YOU.

THAT'S HOW WE DO IT IN THE MOTHERFUCKING HOOD.

THANKS BRO.

STRAIGHT FROM MOTHERFUCKING UPS.

NARRATOR: TOMMY IS ELATED.

HE HAS JUST RECEIVED A SHIPMENT OF FAKES THAT HAVE

BEEN SNEAKED THROUGH CUSTOMS.

TOMMY VUITON: STRAIGHT OUT OF MOTHERFUCKING CHINA...

STRAIGHT TO ME.

THAT'S "A PLUS" RIGHT THERE...

"A PLUS."

I DO WHOLESALE... RETAIL...PRE-TAIL.

DON'T GIVE A FUCK ABOUT IT...

JUST GET IT IN ALL DAY LONG.

NARRATOR: TOMMY IS A WHOLESALER.

TOMMY VUITON: SOMETIMES IT WILL BE $400,000 OF

SHIPMENT WORTH OF CLOTHES OR FOR MERCHANDISE.

EVERY SHIPMENT LIKE A HALF A MILLION.

NARRATOR: THE KEY TO BEING A SUCCESSFUL FAKE

WHOLESALER IS UNDERSTANDING YOUR MARKET.

TOMMY VUITON: RICH PEOPLE BUY IT;

POOR PEOPLE BUY IT... MIDDLE CLASS PEOPLE BUY IT...

OVERSEAS PEOPLE BUY IT.

EVERYBODY'S INTO THE COUNTERFEIT SHIT NOWADAYS.

AND THERE'S NOTHING WRONG WITH IT.

GET YOUR MONEY.

GET YOUR MONEY THE BEST WAY YOU KNOW HOW TO

GET YOUR MONEY.

IF THAT'S SELLING COUNTERFEIT SHIT...

GET YOUR MONEY SELLING COUNTERFEIT SHIT.

FUCK IT.

PEOPLE DON'T HAVE $15,000

$1,500 TO BUY A POCKET BOOK...

SO YOU'D RATHER GIVE ME $250 FOR A POCKET BOOK.

I'LL TAKE IT.

NARRATOR: BASED IN HARLEM IN NEW YORK...

TOMMY SHIPS WHOLESALE TO TOWNS AND CITIES EAST

OF THE MISSISSIPPI.

TOMMY VUITON: I SUPPLY ABOUT 57 TO 60 STORES IN

NEW YORK CITY.

NORTH CAROLINA... SOUTH CAROLINA... FLORIDA...

MIAMI...DETROIT.

AGENT SANTANA: PRIMARILY MOST OF OUR TARGETS HERE

COME RIGHT OUT OF NEW YORK.

THERE'S NO HESITATION TO SHIP THE COUNTERFEIT GOODS.

A LOT OF THESE GUYS ARE BUYING RIGHT FROM NEW YORK...

RIGHT THROUGH UPS.

NARRATOR: A SMALL TOWN SOMEWHERE IN OHIO.

IT'S FRIDAY AND IT'S MARKET DAY BUT THIS ONE

IS DIFFERENT.

AGENT SANTANA: ONCE WE ALL ARRIVE AT THIS LOCATION...

EVERYBODY HAS TO BE IN PLAIN CLOTHES.

AND IF IT LOOKS LIKE SOMEBODY DOESN'T HAVE...

NARRATOR: A TEAM OF 50 HOMELAND SECURITY

IMMIGRATION AND CUSTOMS ENFORCEMENT AGENTS IS

TARGETING A NUMBER OF COUNTERFEIT TRADERS.

AGENT SANTANA: AT ANY TIME I WANNA SEE NO VISIBLE MARKINGS.

I DON'T WANT YOUR RADIOS DOWN.

I WANT NO NOTIFICATION.

ONCE YOU'RE IN PLACE TO HIT YOUR TARGET YOU WILL

THEN...YOU CAN REMOVE YOUR OUTER SHIRT I PREFER YOU DO

THAT AS THE TEAM LEADERS YOU IDENTIFY YOURSELF AND

THEN WE'RE IN BUSINESS.

WE'RE GONNA TAKE EVERYTHING WE CAN.

IF THEY'RE STILL THERE AND IT'S COUNTERFEIT WE'RE

NOT LEAVING WITHOUT IT TODAY.

I WANT YOU TO SEIZE MONEY TODAY.

NARRATOR: AGENT SANTANA AND HIS TEAM HAVE BEEN

DEVELOPING THIS CASE FOR OVER 18 MONTHS.

TODAY IS THE COUNTERFEITERS' DAY OF RECKONING.

AGENT SANTANA: IT'S ANTICIPATED AT THE END OF

THIS THAT WE WILL INDICT APPROXIMATELY SIX TO TEN

PEOPLE AND WE WILL BE CHARGING THEM CRIMINALLY IN

TRAFFICKING IN COUNTERFEIT GOODS.

NARRATOR: PLAIN CLOTHES AGENTS MOVE DISCRETELY

THROUGH THE MARKET TO EYEBALL THE TARGETS.

ONCE IDENTIFIED...

SANTANA GIVES THE ORDER TO MOVE IN MAKE THE ARRESTS

AND SEIZE THE GOODS AND CASH.

AGENT SANTANA: GO...GO...GO!

EXCUSE ME...EXCUSE ME.

NARRATOR: THEY APPREHEND THE FIRST TARGET.

AGENT SANTANA: WHAT HAVE WE GOT?

TIMOTHY STARK: THIS GENTLEMAN'S BEING UNCOOPERATIVE.

SUSPECT: WHY I'M NOT COOPERATIVE?

SERIOUSLY...WHY...WHY?

TIMOTHY STARK: HE DECIDED TO TAKE ALL OF THE

COUNTERFEIT PRODUCTS PUT THEM IN...

NARRATOR: THE SUSPECT IS CONCEALING HIS GOODS

IN MELON CRATES.

SUSPECT: IF I HAVE THIS PRODUCT IN MY VAN WHY YOU

GUYS WANT IT?

AGENT SANTANA: TALK TO RIGHT HERE.

THIS AGENT RIGHT HERE WILL HANDLE EVERYTHING YOU NEED.

OFFICER: HERE'S YOUR RIGHTS.

NO...STOP.

AGENT SANTANA: STOP.

OFFICER: YOU DON'T HAVE ANY WEAPONS ON YOU RIGHT?

NARRATOR: ANOTHER TARGET IS MAKING EXCUSES.

HE CLAIMS HE'S JUST A VISITOR.

AGENT SANTANA: I'M STILL, GO AHEAD ROBERT.

RADIO: 432...COPY...OK.

NARRATOR: WORD SPREADS FAST.

IT'S A MAJOR BUST.

OFFICER: ANY IDENTIFICATION THAT'D BE GREAT.

NARRATOR: A TARGET IS STOPPED AS HE RE-LOADS HIS VAN.

OFFICER: I DIDN'T SEE HIM EVEN SEE ME.

HE JUST KIND OF SLINKED OUT.

NARRATOR: BUT SOME OF THE TARGETS HAVE SLIPPED AWAY.

AGENT SANTANA: DID THEY LEAVE THAT MONEY?

OFFICER: HE GOT A LITTLE BIT OF SCRATCH BUT THEY TOOK THE

CASH BOX SO.

AGENT SANTANA: THEY TOOK THE CASH BOX?

OFFICER: YEAH HE EYEBALLED ME BRO.

I MEAN...THAT'S IT... IT IS WHAT IT IS.

AGENT SANTANA: THAT'S FINE...IT'S OK.

CBP I NEED BOXES AT 199 OUTSIDE.

NARRATOR: AGENTS HOLD A TARGET WHO HAS SO MUCH STUFF

HE COULDN'T PACK IT AWAY IN TIME.

OFFICER: AND THEN THE BIGGER LARGER ONES ARE

THERE THAT'S IT.

AND THEN THE INSIGNIAS.

AGENT SANTANA: OKAY...SOUNDS GOOD.

NARRATOR: A SUSPECT WHOLESALER'S APPREHENDED.

OFFICER: I UNDERSTAND WHAT YOU'RE BUYING.

I UNDERSTAND YOUR SITUATION SIR...

LIKE AS FAR AS WHERE YOU BUY...

NARRATOR: HE'S NERVOUS AND BECOMES ANIMATED.

WHOLESALER: WHAT COMPANY HERE I CAN GET IT?

THESE PEOPLE TO SELL IT HERE.

AGENT SANTANA: SAGAN...GET OVER THERE.

I DON'T LIKE HIS POSTURING.

WHOLESALER: WHAT'S THE COMPANY I CAN GET

TO SEND THAT?

NARRATOR: THE AGENTS DISCOVER THE SUSPECT IS

LIVING IN THE UNITED STATES ILLEGALLY.

AGENT SANTANA: THE SUBJECT IS FINAL ORDER OF REMOVAL.

SO MEANING HE'S... WE'RE GONNA TAKE HIM

AND PROCESS HIM.

DEPUTY SHERIFF: OVER HERE TO THE VAN.

PUT YOUR HANDS UP ON THE VAN FOR ME PLEASE.

YES SIR.

DO YOU HAVE ANY WEAPONS OR ANYTHING ON YOU SIR

THAT I NEED TO KNOW ABOUT?

WHOLESALER: NO I DON'T CARRY GUN.

DEPUTY SHERIFF: OK.

OFFICER: THIS IS MONEY THAT WAS ON THE TABLE

AS WELL UNDER A BOX.

NARRATOR: IT'S BEEN A GOOD DAY FOR THE OHIO COPS BUT

WITH CRACKDOWNS LIKE THESE ON OPEN STREET SALES SOME

BIG CITY PURVEYORS OF FAKES TEND TO OPERATE DIFFERENTLY.

NEW YORK CITY, MID-TOWN MANHATTAN.

MAN: ALL RIGHT BROTHER.

NARRATOR: HERE THE SALES FORCE KEEPS OUT OF SIGHT.

INSTEAD THE COUNTERFEIT TURF BELONGS TO LOOKOUTS

AND RUNNERS.

THEY LEAD CUSTOMERS TO A NEARBY ALLEY TO A SALESMAN

AND A DIGITAL SHOP FRONT.

NARRATOR: ABU SELLS THE BRANDS SOME PEOPLE FEEL THEY

CAN'T LIVE WITHOUT.

MAN: LET ME TELL YOU SOMETHING.

LOT OF JAMAICAN PARTY IN BROOKLYN MAN

COME ON MAN LET'S...

NARRATOR: ABU AND THE LOOKOUTS LIVE HAND TO MOUTH.

THEIR VISA STATUS UNKNOWN.

MAN: FROM JAMAICA MAN... WE'RE AFRICA YOU KNOW?

NARRATOR: IT'S PRECARIOUS WORK.

ABU IS NEVER SURE IF HE'S SELLING TO AN UNDERCOVER.

NARRATOR: THE TABLET STORE FRONT KEEPS COSTS LOW.

NO SKY HIGH RENT... NO UTILITY BILLS.

RICHARD ACEVEDO: ALL THESE BOXES WITH RED LABELS

THIS IS ALL STUFF THAT'S BEEN SEIZED.

IT'S ALL FOUND TO BE IN VIOLATION OF VARIOUS LAWS OF

THE UNITED STATES.

NARRATOR: 24 MILLION CONTAINERS TURN UP AT

AMERICAN SEA PORTS AND BORDER CROSSINGS EACH YEAR.

A QUARTER OF A BILLION EXPRESS PACKAGES

ARRIVE BY AIR.

THE NEW YORK NEW JERSEY PORTS ARE A MAJOR GATEWAY.

FOR WHOLESALERS AND RETAILERS IN THE NEW YORK

REGION THIS IS WHERE THE FAKES COME IN.

CBP AND HOMELAND SECURITY ARE THE GATEKEEPERS.

THEIR JOB IS TO STOP THE FAKES BEFORE

THEY GET THROUGH.

VINCENT MARINO: IT'S GOT A TAG ON IT ITSELF EVEN WITH A

SKU SO IT LOOKS AS REAL AS IT CAN GET AND AN

MSRP STICKER ON IT.

AND WE GOT A WHOLE BOX RIGHT HERE.

THE QUALITY AND THE CRAFTSMANSHIP IS FAIRLY DECENT.

BUT MOST LIKELY SOMEBODY FROM MICHAEL KORS WILL BE

QUICK TO POINT OUT WHAT'S COUNTERFEIT ON THIS BAG.

RICHARD ACEVEDO: IN THIS SHIPMENT WE HAVE HIGH END

COUNTERFEIT WATCHES.

VERY HARD TO DISCERN WHAT'S REAL AND NOT REAL.

AND THEY WILL SELL THESE WATCHES EITHER AS

COUNTERFEIT AND TELL PEOPLE:

"LOOK IT'S A KNOCK OFF WATCH"

BUT THERE'S MORE AN INSIDIOUS SIDE TO THIS TRADE

WHERE THEY'RE SELLING THESE WATCHES ON EBAY

AS THE REAL THING.

YOU NORMALLY SEE THIS RETAILING FOR AT LEAST

$10,000 AND ABOVE FOR A SINGLE WATCH.

GIOVANNI DIMAIOLO: SO IN THIS BOX IF ALL OF THESE

WATCHES WERE REAL...

YOU'RE PROBABLY LOOKING AT ABOUT A MILLION DOLLARS

WORTH OF PRODUCT.

DAVID MONDANARO: THE COUNTERFEITERS KNOW THE WAY

THE LAWS ARE WRITTEN BECAUSE WE'VE PROSECUTED

ENOUGH OF THESE CASES.

IF YOU GET CAUGHT WITH AN ENTIRE SHIPPING CONTAINER OF

THOUSANDS OF ITEMS YOU'RE LOOKING AT THE MAXIMUM

SENTENCING UNDER ANY OF THE COUNTERFEIT GOODS

TRAFFICKING LAWS.

IF YOU GET CAUGHT WITH A COUPLE OF BOXES OF JERSEYS

YOU'RE ALWAYS GONNA BE SMALL TIME.

DOESN'T MATTER THAT YOU MAY DO THOUSANDS AND THOUSANDS

OF BOXES AT A TIME YOU'RE NEVER GONNA BE HIT WITH THAT

LARGE OF A PENALTY.

NARRATOR: A SHORT WALK FROM FIFTH AVENUE THE SUITE MAN

HIDES FROM THE LAW IN HIS MID-TOWN SHOWROOM...

A LOW RENT HOTEL FOR HOOKERS...PIMPS AND

KNOCK OFF STORE MEN.

NARRATOR: BUT HE'S IN TOO DEEP TO BACK OUT NOW.

NARRATOR: SUITE MAN SELLS TO ANYONE BUT HE DOES HAVE

HIS PERSONAL FAVORITES.

NARRATOR: AFTER YEARS OF SELLING ON THE STREET...

SUITE MAN HAS BECOME A SELF-TAUGHT HANDBAG EXPERT.

GIVING INSIDER TIPS HELPS MAKES THE SALE.

NARRATOR: SOMETIMES HE WONDERS IF HIS SKILLS

ARE WASTED.

NARRATOR: CONSUMERS BUY FAKES BECAUSE THEY WANT A BARGAIN.

THE LURE IS THE LABEL.

THE BRAND DOESN'T HAVE TO BE HIGH END BUT IT HAS

TO BE CHEAP.

DAVID LAKE: WE'VE GOT A GUY WHO MAKES FAKE TIDE.

HE PRINTS UP HIS LABELS HE STICKS 'EM ON THE ORANGE

BUCKETS AND HE SELLS 'EM AS FIVE GALLON BUCKETS OF TIDE.

THEY'RE CALLED BUCKET SELLERS AND THEY'VE SPRUNG

UP ALL OVER THE COUNTRY.

WE'RE ONE OF THREE UNITS IN THE UNITED STATES THAT

I KNOW OF WHO FIGHT COUNTERFEIT GOODS.

OK...LET ME KNOW WHAT YOU FIND OUT.

NARRATOR: DAVE LAKE RUNS THE ORGANIZED COMMERCIAL

CRIMES UNIT OF THE PHOENIX POLICE DEPARTMENT.

WITH A TEAM OF NINE UNDERCOVER AGENTS...

THE UNIT WORKS OVER 2,500 CASES EACH YEAR.

DAVID LAKE: THE SHADOW ECONOMY IS ABOUT COMMERCE

IT'S ABOUT ILLEGAL COMMERCE AND THE BIGGEST THREAT IN

THE SHADOW ECONOMY OF COURSE IS IPR WHICH IS

INTELLECTUAL PROPERTY RIGHTS OVER COUNTERFEIT GOODS.

IT IS A PARASITE ON LEGITIMATE COMMERCE AND IT

DRAINS AWAY MONEY THAT WE RELY ON AS A SOCIETY.

NARRATOR: TODAY LAKE AND HIS TEAM ARE TAKING DOWN THE

COUNTERFEIT TIDE BREWER WHO'S WORKING OUT OF A

SELF-STORAGE FACILITY.

DAVID LAKE: HE'S MIXING ALL KINDS OF DIFFERENT CHEMICALS.

WE ASSUME THEY'RE SAFE BUT THEY'RE NOT BEING USED IN

THE WAY THEY WERE INTENDED SO WE DON'T KNOW.

THERE'S NO MATERIAL DATA SHEET ON 'EM.

I MYSELF AM HIGHLY ALLERGIC TO WHATEVER'S IN THESE

CHEMICALS AND THE OTHER THING IS IS THAT HE'S NOT

SELLING THESE TO UPPER MIDDLE CLASS PEOPLE

WHO...THE AVERAGE CONSUMER OF THIS IS A POOR PERSON

WHO'S TRYING TO GET A DEAL.

NARRATOR: TO CATCH THE FAKE TIDE SUSPECT OFFICERS

ENGINEER A BUY BUST STING.

DAVID LAKE: LET'S SEE HERE SO I'M GONNA GIVE YOU...

NARRATOR: LAKE HAS SET UP A HIDDEN CAMERA

OVERLOOKING THE STORAGE UNIT.

HE MONITORS THE TARGET ON HIS SMART PHONE.

DAVID LAKE: OUR UNDERCOVER GUYS ARE GONNA GO

AND THEY'RE GONNA BUY A PALLET OF 'EM.

WE ASK FOR A PALLET TO FORCE HIM TO MAKE A BUNCH AND THEN

WE'RE GONNA DRIVE AWAY AND WE'RE GONNA ARREST HIM

FOR THE MANUFACTURING OF COUNTERFEIT GOODS.

TIDE IS A BIG COMMODITY.

IT'S EXPENSIVE AT THE STORE AND IT'S A CONSUMABLE

MEANING THAT I'M GONNA BUY IT AGAIN AND IT'S PORTABLE.

IT MAKES A GREAT SHADOW ECONOMY CURRENCY

IF YOU WILL.

NARRATOR: AS THE SUSPECT PREPARES THE FAKE TIDE ORDER

LAKE BRIEFS THE ARREST TEAM.

DAVID LAKE: WHEN YOU COME IN THIS WAY WE'LL RUN DOWN

THIS AND STAGE RIGHT THERE SO THAT IF HE FLEES

OR ANYTHING WE'RE THERE TO TAKE HIM WITH YOU.

NARRATOR: AS ARRANGED... THE UNDERCOVER PULLS UP

IN A RENTAL VAN TO PAY THE

SUSPECT AND COLLECT THE TIDE BUCKETS.

JUST A BLOCK AWAY DAVE LAKE'S TEAM...

SUPPORTED BY UNIFORMED OFFICERS...

GETS READY TO MOVE IN.

BUT IT'S NOT CLEAR IF THE SUSPECT IS ARMED.

DAVID LAKE: THAT'S IT RIGHT THERE.

NARRATOR: IN THE BLACK MARKET...

THE FAKE TIDE SCAM IS IN FACT A BETTER BUSINESS THAN

SELLING CRACK OR METH OFF A CORNER.

IT'S A LOT SAFER.

RIVALS ARE LESS LIKELY TO KILL YOU FOR YOUR TURF AND

YOU MIGHT THINK YOU'RE INVISIBLE TO THE COPS...

BUT NOT IN PHOENIX.

DAVID LAKE: YOU'RE GONNA HAVE TO STAY HERE 'CAUSE

GUNS ARE GONNA BE POINTING THIS WAY SO WHEN WE GET UP

TO THERE WE'RE GONNA STAY BACK.

AS SOON AS STARTS UP THE ENGINE WE SHOOT DOWN

THIS WALL AND CROUCH.

NARRATOR: AS THE UNDERCOVER SHAKES ON THE DEAL...

THE TRAP IS SPRUNG.

OFFICER: LET ME SEE YOUR HANDS LET ME SEE YOUR HANDS.

RIGHT THERE.

KEEP 'EM RIGHT THERE.

KEEP 'EM THERE.

NARRATOR: FAKE DETERGENT IS AN EASY SCAM IN

THE SHADOW ECONOMY.

THERE'S A NEVER ENDING DEMAND.

DAVID LAKE: HE'S GONNA SPEND $6 FOR A BUCKET AND

HE'S GONNA SPEND A LITTLE BIT OF MONEY FOR HIS SOAP...

THE WATER'S FREE.

OFFICER: ANY WEAPONS ON YOU MAN?

SUSPECT: A KNIFE RIGHT THERE UNDER THAT SEAT RIGHT THERE.

OFFICER: OK.

DAVID LAKE: AND HE'S PROBABLY COSTING HIM TEN TO

$12 FOR A BUCKET AND HE'S GONNA SELL IT TO US FOR 45

SO HIS PROFIT'S GONNA BE EXTREMELY HIGH.

NOW YOU COMPARE THAT TO DRUGS AND EVERY PERSON WHOSE

HAND IS IN THE PROCESS OF MAKING AND MANUFACTURING AND

MOVING THE DRUGS INTO THE UNITED STATES...

THEY ALL TAKE A PERCENTAGE.

THEY'RE NOT GETTING 500% MARK-UP.

BUT THIS GUY'S GONNA MAKE ALMOST 300% MARK-UP ON THIS.

YOU'RE UNDER ARREST FOR TRAFFICKING AND

MANUFACTURING AND SELLING COUNTERFEIT GOODS.

YOU'RE FAKING THAT TIDE; THAT'S NOT REAL TIDE.

AND WE'VE BEEN BUYING IT FROM YOU FOR A WHILE WITH A

LOT OF DIFFERENT FOLKS BUT YOU KNOW IT'S AGAINST THE

LAW SO WE'RE NOT GONNA PLAY ANY GAMES TAKE YOU DOWN AND

READ YOUR RIGHTS TALK TO YOU ABOUT IT SEE WHAT'S

GOING ON OK?

THAT STUFF BURNS MY HANDS BY THE WAY.

I DON'T KNOW WHAT'S IN THAT BUT I'M ALLERGIC TO IT.

YOU SHOULD FEEL BAD.

NARRATOR: BUT LAKE ENCOUNTERS A PROBLEM.

DAVID LAKE: IDEALLY EVERYTHING OPERATIONALLY WENT

PERFECT BUT YOU CAN NEVER COUNT ON THE SUSPECTS RIGHT?

IDEALLY HE WOULD HAVE HAD THE STICKERS PUT

ON THE BUCKETS.

WE'VE BOUGHT OTHER LOADS FROM HIM THAT HAD THE

STICKERS ON THE BUCKETS SO OUR CASE IS FINE BUT THE BIG

LOAD THAT WE JUST PICKED UP HIS PRODUCTION OPERATION

WASN'T STRONG ENOUGH TO...BASICALLY HE DIDN'T GET

THE CHANCE TO PRINT THE LABELS.

AND A COUNTERFEIT ITEM WITHOUT A LABEL IS NOT A

COUNTERFEIT ITEM.

IT'S JUST A CHEAP ONE.

NARRATOR: IN THE COUNTERFEIT WORLD IT'S THE LABEL THAT

MAKES THE SALE BUT IT'S ALSO WHAT GETS YOU BUSTED.

DAVID MONDANARO: LOOKS LIKE WE GOT A PACKAGE HERE OF

TORY BURCH METAL LABELS.

NOW THIS IS THE NEW PARADIGM WE SEE.

WE DO SEE COMING THROUGH SEA FREIGHT ARE CONTAINERS

OF JUST BLANK PRODUCT.

NARRATOR: COUNTERFEITERS USE THE LAW TO BEAT THE

LAW MAKERS IN AN ELABORATE GAME OF CAT AND MOUSE.

DAVID MONDANARO: IT'LL BE BLANK HANDBAGS OR GENERIC AS

WE CALL 'EM HANDBAGS PURSES AND WALLETS.

THEY DON'T HAVE ANY LABELS ON 'EM.

THEN WHAT WE'D FIND IS WE GET BOXES OF NOTHING BUT LABELS.

THEY HAVE THESE WAREHOUSES HERE IN NEW YORK WHERE

THEY'LL RE-LABEL ALL THEIR PRODUCTS SO THAT IT GOES

FROM A BUNCH OF PERFECTLY LEGAL GENERIC HANDBAGS THAT

ARE COMPLETELY BLANK BUT THE MINUTE THEY START AFFIXING

THESE LABELS TO 'EM THAT'S WHEN THEY MAKE THE FINAL

COUNTERFEIT PRODUCT.

THEY'LL RUN THESE WAREHOUSE OPERATIONS WHERE VEHICLES

FROM ALL OVER THE COUNTRY COME:

MARYLAND...GEORGIA... NORTH CAROLINA...TEXAS.

THEY'LL PULL UP...

THEY'LL LOAD THE VEHICLE FULL OF BLANK BAGS AND THEN

AT THE LAST MINUTE...

THE PERSON WILL GET EITHER A BOX LIKE THIS SO THAT HE

CAN GO WHEREVER HE IS...

WHATEVER FLEA MARKET AND MAKE HIS FINISHED PRODUCT.

NARRATOR: FOR THE INSPECTORS IT'S LIKE LOOKING

FOR A NEEDLE IN A HAYSTACK.

JFK PACKAGE HANDLERS PROCESS UP TO 600,000

INCOMING SHIPMENTS A DAY.

THE SHEER VOLUME GIVES THE COUNTERFEITERS AN EDGE AND

GREATER EARNING POTENTIAL.

DAVID MONDANARO: THE PROFIT THEY MAKE IS AMAZING.

WE GET THEIR BANK ACCOUNTS WHEN WE DO THESE

INVESTIGATIONS AND THEY'RE MAKING MILLIONS OF DOLLARS.

THEY DO EVERYTHING THEY CAN TO TRY AND LAUNDER IT

AND THEN SEND THE MONEY OVERSEAS.

EVERYTHING THEY CAN THAT WE USUALLY SEE WITH THE

DRUG INDUSTRY WE SEE THE SAME PROBLEMS COMING IN FOR

THE SMUGGLERS OF THESE ITEMS.

THEY JUST CAN'T GET RID OF THE MONEY FAST ENOUGH.

NARRATOR: BUT CBP HAS SOME TRICKS UP ITS SLEEVE.

AL D'ONOFRIO: THEY'RE LIKE ANY OTHER SMUGGLING GROUP...

THEY TRY TO BE UNPREDICTABLE AND WE TRY TO

BE MORE UNPREDICTABLE AS THEM IN OUR EXAMINATION TECHNIQUES.

WHAT I HAVE HERE IS A PHYSICAL EXAM BEING

CONDUCTED ON A SHIPMENT OF BOOTS THAT ARE COMING

OUT OF CHINA.

AND IF YOU LOOK AT THE BOOTS THEMSELVES THEY ARE

SIMILAR TO UGGS BUT NOT MARKED AS UGG.

IF YOU CLEAR OUT SOME OF THE EXTRA LINES IT'S U-G-G.

SO THAT'S GOING TO BE MANIPULATED.

NARRATOR: COUNTERFEITERS CLEVERLY MASK THE FAKE BRANDING.

AL D'ONOFRIO: THIS BOOT CAME IN WITH THAT TYPE OF LABEL.

THE OFFICERS RIPPED A LABEL OFF AND UNDERNEATH IS

A TRADE MARK LOGO OF UGG.

THE BOTTOM OF THE BOOT HAD THIS TYPE OF SOLE.

THE OFFICERS LIFTED IT OFF SEPARATED THE GLUE AND THERE

IS AN UNLICENSED IMPORTATION OF THE UGG TRADEMARK.

NARRATOR: THE COPS GET WISE.

FAKERS BOB AND WEAVE AND ACROSS TOWN SOME FAKE BLING

IS CHANGING HANDS.

THE WATCHMAN: NOW YOU KNOW ALL THE STUFF IS ALL

SWISS MOVEMENT.

CLIENT: SHE GONNA LOVE THAT.

THE WATCHMAN: NOW IF YOU WANT WE COULD ALSO ICE THAT OUT.

YOU KNOW WE COULD DO IT LIKE THAT.

NARRATOR: THE WATCHMAN SELLS FAKE WATCHES AND CHAINS

BUT HE DOESN'T IMPORT THEM.

HE BUYS LEGIT COMPONENTS AND MAKES THEM HIMSELF.

HE FIGURES HE'S GIVING VALUE FOR MONEY.

THE WATCHMAN: I ALWAYS TELL MY CLIENTS WHY SPEND

45,000...50,000?

SPEND 10,000...12,000 AND I'LL GET YOU THE SAME EXACT

WATCH SAME EXACT FEEL.

NARRATOR: ONLY THEY'RE NOT THE SAME WATCH.

THEY'RE FAKES.

THE BEST COUNTERFEIT BLING HE CLAIMS THAT

MONEY CAN BUY.

IN FACT THE WATCHMAN HYPES HIS PRODUCT SO MUCH

HE SEEMS TO BELIEVE HIS OWN RAP.

THE WATCHMAN: THE REAL AUDEMARS PIGUET IS IDENTICAL.

NOT A DIFFERENCE AT ALL.

ORIGINAL PRICE REAL WATCH ABOUT $47,000

I GIVE IT TO YOU $4,500.

NARRATOR: FOR THE WATCHMAN ATTENTION TO DETAIL

IS EVERYTHING.

THE WATCHMAN: WE REPLICATE EVERY WATCH TO BE IDENTICAL.

GRADE A. NO MISTAKES...NO FLAWS.

WE SET THE STONES EXACTLY HOW THE ORIGINAL WATCH

IS DESIGNED TO BE.

NARRATOR: THE DIAMONDS SPARKLE AND THE GOLD HAS A HALLMARK.

NONE OF IT'S GENUINE.

THE WATCHMAN: THIS HERE'S A 14 CARAT STAMP AS YOU CAN

SEE WHERE WE STAMP EVERYTHING OFFICIAL FROM THE

WATCHES TO THE BRACELETS TO THE RINGS TO THE EARRINGS

TO THE CUSTOM GRILLS.

NO-ONE COULD POSSIBLY GET ANYTHING STAMPED UNLESS

YOU IN THIS INSIDE JEWELRY WORLD.

NARRATOR: THE FAKE GOLD CHAINS AND JEWELRY ONLY

BECOME ILLEGAL WHEN HE BRANDS THEM.

THE WATCHMAN CLAIMS HIS BLING WATCHES AND FAKE

JEWELRY ARE IN HIGH DEMAND.

THE WATCHMAN: MONEY-WISE... I MIGHT GROSS IN A WEEK A

GOOD WEEK MAYBE ABOUT 18,000 TO 25,000

I TRIPLE MY MONEY UP THREE TIMES.

SO YOU WANT IT?

CLIENT: YEAH...YEAH... OF COURSE.

NARRATOR: THE WATCHMAN CLOSES THE DEAL.

THE WATCHMAN: JUST GIVE ME A DEPOSIT THEN.

MY CLIENTELE CONSISTS FROM YOUR LOCAL STREET DRUG DEALER

BOXERS... PEOPLE THAT I DEAL WITH PERSONALLY

IN THE MUSIC INDUSTRY... NBA PLAYERS.

NO-ONE WILL EVER KNOW UNLESS YOU TELL 'EM IT'S FAKE.

NARRATOR: THE WATCHMAN PERFECTED HIS SALES

TECHNIQUE IN THE DRUG GAME.

HE SWAPPED ROCKS OF CRACK FOR FAKE ROCKS.

THE WATCHMAN: TOO MANY OF MY FALLEN BROTHERS I GREW UP

AROUND THE BLOODS GREW UP AROUND GANGS AND IT WAS

EITHER JAIL OR YOU KNOW LAYING IN A COFFIN.

NARRATOR: FOR TOMMY VUITON KNOCK OFFS ARE A GIANT LEAP

UP FROM DRUG DEALING.

TOMMY VUITON: I'M NO DRUG DEALER.

I CAME FROM THE STREETS BUT I WORKED MY WAY UP TO DO THE

RIGHT THING BY OPENING IN BUSINESSES AND I'LL TRY TO

MAKE MYSELF COMFORTABLE...

THE WAY I CAN LIVE...

THE WAY I CAN TAKE CARE OF MY FAMILY AND NOBODY CAN SAY

"OH HE'S OUT HERE BEING A DRUG DEALER."

ALL THEY CAN SAY IS "OH HE'S OUT HE'S SELLING CLOTHES.

HE'S SELLING POCKET BOOKS.

HE DOING SOMETHING POSITIVE HE AIN'T TRYING TO DO

NOTHING NEGATIVE."

IF I'M SELLING DRUGS OR SELLING CLOTHES THAT'S A BIG

MOTHERFUCKING CHANGE.

THAT'S A BIG CHANGE.

'CAUSE ONCE YOU CHANGE FROM DRUGS TO CLOTHES THAT MEANS

YOU TRYING TO CHANGE YOUR LIFE AROUND.

YOU AIN'T TRYING TO GO TO JAIL FOR 100 YEARS.

NARRATOR: TOMMY RUNS A CROOKED BUSINESS BUT HE

STILL HAS RESPONSIBILITIES.

TOMMY VUITON: I GOT ABOUT 50 OR 60 PEOPLE EMPLOYED.

THEY GOT JOBS...

THEY CAN TAKE CARE OF THEIR FAMILY.

IF THE BUSINESS IS SLOW THEY STILL GET PAID.

NARRATOR: TOMMY FACES ALL OF THE RISKS OF A LEGITIMATE

BUSINESSMAN AND THEN SOME.

RISK NUMBER ONE: CLEARING CUSTOMS.

TOMMY VUITON: I LOSE ABOUT 7%...

$40,000...$50,000 WORTH OF STUFF.

IT DON'T WIPE ME OUT I STILL MAKE ENDS MEET.

NARRATOR: RISK NUMBER TWO: GETTING BUSTED.

TOMMY VUITON: YOU WILL GET LOCKED UP FOR COUNTERFEITING

THAT'S FOR ONE.

AND IF YOU GOT A LOT OF IT YOU GOING TO JAIL FOR A VERY

PRETTY LONG TIME.

BUT WHEN YOU GET CAUGHT WITH THE MOTHER-LOAD YOU

GOING TO THE FEDS.

THE WAY THEY DO IT WITH THIS COUNTERFEIT SHIT

THEY DON'T WANT NOBODY TO EAT.

IF THE GOVERNMENT AIN'T EATING OFF OF IT...

THEY DON'T WANT NOBODY EATING OFF OF IT.

70 MONTHS...90 MONTHS.

WELL IF YOU DON'T KNOW WHAT 90 MONTHS OR 70 MONTHS

IS DO THE MATH ON THE CALENDAR BECAUSE

THAT'S A LOTTA YEARS.

NARRATOR: RISK NUMBER THREE: TRUSTING YOUR SUPPLIER.

TOMMY VUITON: YOU GOT THE CHINESE YOU GOT THE INDIANS

AND YOU GOT THE AFRICANS.

I JUST DEAL WITH THE CHINESE.

AND THEY FIGURE IF YOU GOT A LITTLE BIT OF MONEY

WE GOT SOME SHIT FOR YOU.

YOU GOTTA LOTTA MONEY WE GOT SOME BETTER SHIT FOR YOU.

IF THEY SEND ME SOME BULLSHIT WELL I GOT TO JUST DEAL WITH

THE BULLSHIT BECAUSE THEY AIN'T GONNA TAKE IT BACK.

I JUST HAVE TO SELL THE BULLSHIT.

IF THEY SEND ME SOME D QUALITY SHIT I JUST HAVE

TO SELL THE D QUALITY SHIT BECAUSE ME GIVING IT

BACK I'M GONNA LOSE EVERYTHING.

NARRATOR: BUYING COUNTERFEIT GOODS BY THE CONTAINER LOAD

FROM THE CHINESE TAUGHT TOMMY VUITON AN INVALUABLE

BUSINESS LESSON.

TOMMY VUITON: SO YOU GOTTA TRUST SOMEBODY SOME TIME

SO I TRUSTED 'EM.

THEY EATING...I'M EATING... THE STREETS IS EATING...

EVERYBODY'S HAPPY.

NARRATOR: TEN YEARS AGO TOMMY TRAVELLED ALONE TO

CHINA TO ESTABLISH A PERSONAL CONNECTION WITH

COUNTERFEIT MANUFACTURERS.

AT FIRST THEY DIDN'T TAKE TO HIM.

TOMMY VUITON: WHEN I WENT THERE THEY DIDN'T WANNA

BOTHER WITH ME 'CAUSE THEY FIGURE A BLACK MAN IN CHINA

HE AIN'T COMING HERE HE COMING HERE TO MESS WITH

GIRLS BUT THEY DON'T UNDERSTAND I WAS COMING

THERE FOR BUSINESS.

I NEED MONEY.

NARRATOR: BUT HE SOON WON THEM OVER.

TOMMY VUITON: THEY LOVE BLACK PEOPLE.

THEY LOVE THE SAME THING WE LOVE...MONEY.

NARRATOR: TO CATCH A FAKES ENTREPRENEUR YOU NEED

A FAKES DETECTIVE.

TED KAVOWRAS: I TRAVEL WITH DIFFERENT LOOKS AND

DIFFERENT PERSONAS AND PRETENDING TO BE FROM

DIFFERENT PLACES.

FOR SOME CASES WE'LL HAVE TO PRETEND TO BE LET'S SAY

EASTERN EUROPEAN SO WE MADE THESE AND I COME IN AND...

OR WE CAN LOOK LIKE A USED CAR SALESMAN.

NARRATOR: TED KAVOWRAS IS A PRIVATE DETECTIVE.

A FORMER NEW YORK COP HE'S BEEN STALKING COUNTERFEITERS

IN CHINA FOR NEARLY 20 YEARS.

TED KAVOWRAS: WE HAVE TEN FIELD AGENTS WHO ARE OFTEN

IN THE FIELD AND UNDERCOVER AND SUPPORTING THEM

WE HAVE ABOUT 30 STAFF.

AND THOSE ARE RESEARCHERS WHO WILL PROFILE OUR TARGETS.

EVEN THOUGH ALL OF OUR AGENTS SPEAK MANDARIN WE

WILL PRETEND WE DON'T SO YOU KNOW BECAUSE IF

THEY REALIZE WE SPEAK MANDARIN THEN THEY'LL JUST

SPEAK IN SOME LOCAL DIALECT THAT WE DON'T UNDERSTAND.

.

NARRATOR: TODAY TED IS GOING UNDERCOVER.

HE'S HEADING TO SHENZHEN, MAINLAND CHINA...

JUST ACROSS THE BORDER FROM HONG KONG.

IN CHINA COUNTERFEITING IS WIDESPREAD

BUT OFFICIALLY ILLEGAL.

IF TED GETS RUMBLED THINGS COULD GET UGLY.

TED KAVOWRAS: SHENZHEN'S WHERE A LOT OF MOBILE AND

ELECTRONIC ACCESSORIES ARE MANUFACTURED.

AND THUS YOU HAVE THE SUB-FACTORIES WHO ARE

SUPPLYING CHIP SETS AND COMPONENTS WHICH ARE THEN

USED IN THESE PRODUCTS.

NARRATOR: IN THE 1980'S SHENZHEN WAS A SMALL

FISHING VILLAGE.

NOW IT'S ONE OF THE FASTEST GROWING CITIES IN THE WORLD.

THE POPULATION IS OVER TEN MILLION AND COUNTING.

KAVOWRAS AND HIS LOCAL AGENTS ARE INVESTIGATING AN

ELECTRONICS COMPANY COUNTERFEITING A SATELLITE

RECEIVER WHOSE PATENT BELONGS TO TED'S CLIENT

BASED IN GERMANY.

TED KAVOWRAS: YOU KNOW COUNTERFEITERS IN CHINA LIKE

TO SEE A FAT GUY LIKE ME WHO WANTS...

TO BUY A LOT OF THEIR PRODUCT AND YOU KNOW WE SPEND MONEY.

WE ACTUALLY BUY THE PRODUCTS AND IT WORKS VERY WELL.

NARRATOR: TED DRAWS ON HIS TRAINING IN U.S. POLICING.

ONCE A LAW MAN ALWAYS A LAW MAN.

TED KAVOWRAS: THE NEW YORK CITY POLICE ACADEMY IS

A VERY GOOD ACADEMY.

IT'S SIX MONTHS FULL TIME AND THEY TRAIN YOU TO DEAL

WITH STRESSFUL SITUATIONS TACTICAL SITUATIONS AND WHEN

YOU GO UNDERCOVER ALL OF THIS LENDS TO ASSISTING YOU

TO KEEP YOUR COOL AND KEEP THINGS GOING AND TO WORK THE

TARGET AND PLAY THEM AND GET THINGS GOING PROPERLY.

NARRATOR: WORKING HIS TARGETS FROM THE INSIDE

GAINING THEIR TRUST TED USES A RANGE OF SECRET CAMERAS

TO GATHER EVIDENCE.

TED KAVOWRAS: SOME OF OUR CAMERAS ARE VERY HIGH

RESOLUTION SO I'LL PUT THEM ON AND I'LL PRETEND TO BE

FROM TEXAS AND WE'LL WIRE THEM UP.

SO THIS'LL BE OUR CAMERA.

THE ONE CAMERA WE DEVELOPED WHERE WE CONCEALED THE

CAMERA SYSTEM BEHIND THE LABEL AND THIS WAY WE CAN GO

ON A POOL OR THE BEACH AND MANY TRADITIONAL CHINESE

CONSPIRACIES IF THEY DON'T WANT YOU TO RECORD THEM

THEY'LL TAKE YOU TO A SAUNA OR SOMETHING WHERE YOU'LL BE

UNDRESSED COMPLETELY NAKED AND SPEAK TO THEM

IN THE SAUNA.

SO SOMEBODY OBVIOUSLY CAN HAVE A GLASS OF WATER IN THE

HOT SAUNA SO THAT'S WHAT THIS WAS DESIGNED FOR.

NARRATOR: TED WORKS FOR MULTINATIONALS...

CUSTOMS AGENCIES AND LAW ENFORCEMENT.

CROSSING COUNTERFEITERS CAN BE A VERY BAD MOVE.

TED KAVOWRAS: YOU WANNA BE ABLE TO SPOT ANY

POTENTIAL DANGER BEFORE IT COMES WITHIN REACH.

NARRATOR: TED KAVOWRAS IS UNDERCOVER IN MAINLAND CHINA.

HE KNOWS THAT HE HAS TO WATCH HIS BACK.

TED KAVOWRAS: MANY TIMES AFTER WE MEET A TARGET...

WE'LL DO A COUNTER SURVEILLANCE OPERATION TO

MAKE SURE THAT WE'RE NOT FOLLOWED.

NARRATOR: BUT THE COUNTERFEITERS LIKE TO PLAY

THE SAME GAME.

TED KAVOWRAS: SOME COUNTERFEITERS ARE VERY-VERY

SOPHISTICATED BUSINESSMEN AND THEY'LL DO A COUNTER

INTELLIGENCE OR A COUNTER SURVEILLANCE OPERATION ON US

TO SEE WHO AND WHAT WE ARE.

NARRATOR: STALKING FAKE OPERATORS YOU HAVE TO KNOW

WHAT YOU'RE WALKING INTO.

TED KAVOWRAS: THERE ARE SOME TOWNS THAT ARE DEDICATED

TO MANUFACTURING SPECIFIC GOODS.

SO YOU GO TO THE TOWN AND ALMOST EVERYBODY IN THAT

TOWN IS INVOLVED IN THAT.

SO CIGARETTE CASES SOMETIMES ARE LIKE THAT.

SO EVERYBODY IN THAT TOWN WILL BE INVOLVED IN THE

CIGARETTE TRADE.

THOSE ARE VERY DIFFICULT AND DANGEROUS CASES.

YOU SEND THE WRONG AGENT AT THE WRONG TIME HE

JUST WON'T BE COMING OUT.

NARRATOR: TED AND HIS AGENTS ARE POSING AS UNSCRUPULOUS

BUYERS EAGER TO PURCHASE COUNTERFEIT SATELLITE RECEIVERS.

TED HAS DISCOVERED THAT THE FACTORY IS STEALING

HIS CLIENT'S MARKET SHARE.

TED KAVOWRAS: I LOVE YOUR BAG.

WOMAN: THANK YOU SIR.

NARRATOR: IT DOESN'T TAKE LONG TO VERIFY THE FACTORY

IS PRODUCING FAKES AT AN ALARMING RATE.

NARRATOR: TED WINDS UP THE MEETING BY PLACING

A LARGE ORDER.

NARRATOR: WITH THE FAKE DEAL SET UP TED WILL HAND OVER

THE VIDEO TO THE AUTHORITIES.

MAN: YES. TED KAVOWRAS: CAN WE REST?

WOMAN: I'M DONE WITH HIM.

NARRATOR: THE DYNAMICS OF THE COUNTERFEIT TRADE

ARE SHIFTING.

CHINA IS POISED TO BECOME THE WORLD'S LARGEST

CONSUMER MARKET.

LEAVING BUYERS EXPOSED TO THE FAKERS' DARK ARTS.

TED KAVOWRAS: NO QUALITY CONTROL...

THERE'S NO GUARANTEE TO THE CONSUMER.

AND THE COUNTERFEITER IS STEALING AND EXPLOITING THE

GOOD WILL OF THAT BRAND.

MR. LEE: IF I WASN'T DOING THIS...

I WOULD BE A PEASANT.

THE MARKET IS HUGE.

NARRATOR: MR. LEE IS A FAKE SMART PHONE ENTREPRENEUR.

MR. LEE: I USED TO MAKE NOKIA BUT IT'S NO LONGER SELLING

WELL SO NOW WE DO ONLY SAMSUNG AND IPHONE.

NARRATOR: IN SHENZHEN GENUINE IPHONES ARE EXPENSIVE.

NEARLY THREE TIMES THE MONTHLY MINIMUM WAGE.

SHORT SUPPLY OF THE GENUINE ARTICLE COUPLED WITH RISING

WAGES STIMULATES THE DEMAND FOR SOMETHING

RESEMBLING THE REAL THING.

MR. LEE: A HANDSET LIKE THIS HAS MANY DIFFERENT COMPONENTS.

THE OUTER CASE IS PART OF THE PHONE ALSO THE SCREEN...

THE BATTERY AND THE CIRCUIT BOARD INSIDE.

THE FLASHLIGHT AND THE CAMERA,

ALL COME FROM DIFFERENT SUPPLIERS THEN THEY'RE

ALL ASSEMBLED TOGETHER.

THIS ONE IS RELATIVELY GOOD QUALITY

SO IT COSTS MORE, AROUND 1500-1600 RMB.

NARRATOR: MR. LEE SELLS AROUND 1200 FAKE SMART

PHONES EACH MONTH IN THE SHENZHEN MARKET.

MR. LEE: THE APPEARANCE IS THE SAME ALTHOUGH THE

FUNCTIONALITY HAS BEEN COMPROMISED BUT IT'S CHEAP.

NARRATOR: THE SHENZHEN MARKET SELLS EVERY LATEST

MODEL GENUINE AND FAKE.

MAN: IPHONE 6...NEW MODEL.

SALESMAN: VERY GOOD.

NARRATOR: INVESTIGATOR TED KAVOWRAS IS DISCOVERING HOW

SOPHISTICATED THE COUNTERFEIT PRODUCT LINES

ARE BECOMING.

TED KAVOWRAS: AND THERE'S "A GRADE"..."B GRADE"

AND "C GRADE."

A GRADE SHOULD BE 100% COPY.

I MEAN YOU CAN'T TELL THE ORIGINAL FROM IT AND IN SOME

CASES SOME BRANDS MAY HAVE DIFFICULTY DISCERNING WHAT'S

REAL AND WHAT'S NOT BECAUSE THE VERY SOPHISTICATED

COUNTERFEITERS WILL TRY TO OBTAIN GENUINE COMPONENTS TO

ASSEMBLE THEIR GOODS WITH.

SO IT BECOMES QUITE COMPLEX.

NARRATOR: FOR MR. LEE THE COUNTERFEIT INDUSTRY

OFFERS OPPORTUNITY.

MR. LEE: MOST IMPORTANTLY WE CREATE JOBS

FOR PEOPLE IN SHENZHEN.

WORKERS IN FACTORIES, DISTRIBUTORS RETAILERS ETC.

WE MAINTAIN THE EMPLOYMENT RATES AND THE STABILITY

OF THE SOCIETY.

THERE ARE SMALL WORKSHOPS NEARBY MANUFACTURING

MANY DIFFERENT TYPES OF COMPONENTS.

THE WORKING CONDITIONS ARE NOT AS GOOD AS IN

THE BIG FACTORIES.

MOST OF THE PEOPLE LIVE IN THE FACTORY OWNER'S VILLAGE...

HIS RELATIVES OR PEOPLE REFERRED BY FRIENDS.

NARRATOR: THE PROBLEM FOR MR. LEE IS HIS OPPORTUNITIES

ARE ON THE WRONG SIDE OF THE LAW.

MR. LEE: THE RISK DEFINITELY EXISTS BUT CAN BE AVOIDED

BY CERTAIN MEASURES.

FOR EXAMPLE FOR WHOLESALERS LIKE ME WE STORE HANDSETS

AND PACKAGES IN DIFFERENT PLACES.

IF WE GET CAUGHT WITH COUNTERFEIT GOODS WE'LL GET

A BIG FINE OR END UP IN PRISON FOR SURE.

THE IMPRISONMENT COULD LAST UP TO TWO YEARS.

NARRATOR: BACK AT JFK AIRPORT A CONSIGNMENT OF

PANELS HAS CAUGHT THE EYE OF INSPECTORS.

THE PANELS APPEAR INNOCENT ENOUGH BUT THE CBP KNOWS

THAT LOOKS CAN BE DECEIVING.

NARRATOR: THIS IS THE NEW MONEY MAKER IN THE BLACK MARKET.

PRODUCTION AND SHIPPING COSTS ARE MINUSCULE AND

THE RETURNS SPECTACULAR.

DAVID MONDANARO: THEY ALL CITI

RICHARD ACEVEDO: TOYS R US.

DAVID MONDANARO: LOOKS LIKE WHAT WE HAVE HERE IS A

BUNCH OF BLANK CREDIT CARDS THAT WERE CONCEALED WITHIN

WHAT WAS SUPPOSED TO BE JUST A WOODEN SHELF...

COMING IN FROM CHINA.

ALL THEY NEED NOW IS TO JUST GO ONLINE BUY THE DATA FROM

WHATEVER HACKER SITE HAS ALL THE DATA FOR SALE AND

THEY EMBOSS IN THE NUMBERS AND YOU'LL HAVE A

FULLY FUNCTIONING BANK OF AMERICA CARD.

NARRATOR: THESE CARDS ARE ALMOST FLAWLESS BUT

THE HOLOGRAM IS NOT QUITE PERFECT.

THE FAKERS WILL BE WORKING ON THAT.

RICHARD ACEVEDO: A FEW MONTHS AGO WE WE'RE ACTUALLY

SEIZING THE EMBOSSING MACHINES THAT ACTUALLY PRINT

THE RAISED LETTERING ONTO CREDIT CARDS.

DAVID MONDANARO: THEY CAN GO OUT TO THE STORES AND

JUST START BUYING WHATEVER THEY WANT.

RETURNING ITEMS GETTING CASH BACK FOR RETURNS.

I MEAN IT IS THE FINAL PIECE OF ALL THAT INFORMATION THAT

GETS STOLEN.

NARRATOR: THE CARD FRAUDSTERS ARE ALSO SHIPPING

TO AUSTRALIA...

THE MIDDLE EAST...CANADA...

EUROPE AND JAPAN.

IN 2013 COUNTERFEIT CARD FRAUDSTERS EMBEZZLED OVER

12 BILLION DOLLARS FROM CUSTOMERS'

ACCOUNTS WORLDWIDE.

BANK CARD FRAUD IS GROWING EACH YEAR.

RICHARD ACEVEDO: ANYWHERE BETWEEN 500 TO 700

CONCEALED CREDIT CARDS IN THIS PARTICULAR SINGLE

SHIPMENT HERE.

RECENTLY THEY ARRESTED AN ORGANIZED CRIME RING AND

THEY LITERALLY HAVE AN ARMY OF MINIONS THAT RUN OUT

THERE AND TRY TO HIT THESE ATM MACHINES AS SOON AS

POSSIBLE BEFORE THE BANKS REALIZE WHAT'S GOING ON.

AND THEY ACTUALLY WERE ABLE TO WITHDRAW OVER $7 TO $10 MILLION

IN CASH FROM VARIOUS ATM'S SPREAD OUT AROUND THE CITY.

DAVID MONDANARO: THEY'VE GOT HUNDREDS AND HUNDREDS OF

ATTEMPTS TO JUST GET IT RIGHT ONCE.

AL D'ONOFRIO: OPEN THAT GATE?

THANK YOU.

NARRATOR: IN THE SECURE YARD OF THE NEW YORK

NEW JERSEY PORT CBP OFFICERS HAVE IDENTIFIED

A SUSPECT CONTAINER.

THE X-RAY IMAGING DOES NOT MATCH THE MANIFEST.

AL D'ONOFRIO: THAT CONTAINER WILL BE UPGRADED

FOR A PHYSICAL EXAMINATION.

IT WILL BE MOVED FROM THIS FACILITY INTO THE WAREHOUSE

WHERE IT WILL BE TAKEN OUT.

THE MERCHANDISE WILL BE DE-VANNED REMOVED FROM THE

CONTAINER FOR A PHYSICAL BOX-BY-BOX EXAMINATION UNTIL

WE ARE SATISFIED BY OUR OFFICERS.

NARRATOR: WHILE THE CBP USES A COMBINATION OF HIGH TECH

AND OLD FASHIONED DETECTIVE WORK TO STOP THE FLOW OF

COUNTERFEITS TOMMY VUITON HAS MANAGED TO GET ANOTHER

CONSIGNMENT THROUGH.

FOR TOMMY... THE NEW YORK KNOCK OFF PIRATE

COUNTERFEIT IS STILL THE BEST HUSTLE IN TOWN.

TOMMY VUITON: THIS ONE HERE IS LEATHER.

YOU CAN TELL... GIVE YOU A TAG FOR IT.

THIS IS "A PLUS."

YOU CAN LOOK AT THE INSIDE LOOK AT THE LOGO LOOK

AT THE BUCKLE.

THIS IS "A PLUS" RIGHT HERE.

NARRATOR: IT'S ALL ABOUT THE MONEY.

THE BUSINESS IS JUST TOO GOOD TO QUIT.

TOMMY VUITON: HAVE I EVER BEEN ARRESTED FOR IT?

YES I HAVE.

HAVE I HAD TO GET BAILED OUT FOR IT?

YES I HAVE.

HAVE THEY EVER TOOK MY MERCHANDISE?

YES THEY DID.

HAVE THEY EVER TOOK MY MERCHANDISE AND THEN

SHOW IT IN COURT?

YES THEY DID.

NARRATOR: THE FLOW OF COUNTERFEIT GOODS FROM CHINA;

ACROSS THE U.S. BORDERS GOES ON 24/7.

DAVID LAKE: THE COUNTERFEIT GOODS TRADE IS

A $500 BILLION A YEAR GLOBAL INDUSTRY.

IT IS A PARASITE ON LEGITIMATE COMMERCE AND IT

DRAINS AWAY MONEY THAT WE RELY ON AS A SOCIETY.

WE HAVE OUR CUSTOMS AND BORDER PATROL EVALUATING AND

WATCHING EVERYTHING THAT COMES INTO THE COUNTRY AND

WHEN THEY DO THAT...

THEY'RE DOING THE BEST THEY CAN BUT THEY CAN ONLY GET TO

A SMALL PORTION OF THE CONTAINERS.

THERE'S JUST TOO MUCH COMMERCE COMING IN.

WE'D SHUT COMMERCE DOWN IF WE STOPPED AND

INSPECTED EVERYTHING.

SO THEY'RE NOT ALLOWED TO STOP ALL OF IT 'TIL THEY

CHECK IT ALL SO THEY DO THE VERY BEST THEY CAN AND

A LOT GETS THROUGH.

YOU'RE TALKING ABOUT MULTI-TRILLION DOLLAR

INDUSTRY COMING INTO THE UNITED STATES AND SO WE JUST

DON'T HAVE ENOUGH PEOPLE.

TOMMY VUITON: TRYING TO MAKE A DOLLAR.

TRYING TO BENEFIT SOMETHING BUT NO...

THESE MOTHERFUCKERS WOULD RATHER LOCK THAT

MOTHERFUCKER UP

INSTEAD OF SAYING "ALL RIGHT HE'S DOING

SOMETHING POSITIVE INSTEAD OF SOMETHING NEGATIVE."

CHINESE PEOPLE... I LOVE Y'ALL.

HOPE Y'ALL NEVER GO OUT OF BUSINESS.

I HOPE THEY NEVER ... AROUND AND DO

NOTHING TO YOU.

I HOPE THE GOVERNMENT DON'T EVEN TRY TO DO

NOTHING TO Y'ALL.

BECAUSE Y'ALL CHINESE PEOPLE...

YOU'RE REALLY HELPING ME OUT.