Kris Buckner

(February 13, 2008) I have been a private investigator for over 12 years and specialize in investigations involving the sales, manufacture and distribution of counterfeit merchandise. My company currently represents over 85 brand owners. Investigative Consultants was started as a single-person operation in 1994 and we now employ 19 full-time employees and several part-time and contracted investigators. Ninety-nine percent of our company’s time is spent investigating intellectual property matters.

Scope of Problem

Three words describe the true scope of the counterfeiting problem: “out of control.”

The counterfeiting problem is not just limited to handbags, watches and other luxury goods. I have been involved in cases involving glue, children’s toys, sunglasses, food and numerous other items. There have been cases where brake pads, aircraft parts, baby formula and cough syrup have also been counterfeited.

You name it and they will counterfeit it. If it will make them money, they will copy it. Counterfeiters do not care who they hurt or kill as long as they are making money.

The counterfeiting problem is similar to the war on drugs, and until some major changes are made in our judicial system and in the public’s perception of counterfeiting, the problem will continue to grow and only the criminals will prosper.

Lucrative Crime Operation

Counterfeit operations mirror the drug trade; however, counterfeiting is much more lucrative than selling drugs. A counterfeiter can sell a counterfeit handbag and make more money than the guy who is selling rock cocaine. That is why we need to amend our counterfeiting statute to take away the opportunity for these criminals to prosper so greatly off their illegal activities.

If counterfeiters pay stiffer penalties for their crimes, it would act as a greater deterrent to not become involved in counterfeit activity. These counterfeiters should also not be allowed to keep the “fruits of their crime.” That is why it is important to amend our statute to include forfeiture of all proceeds of the crime.

We also need to address the issue of unassembled component parts in our law. There have been numerous cases that have been difficult to prosecute because of the way our law is written.

I recall a recent case in San Francisco. The subject of the investigation was operating a retail store near Fisherman’s Wharf. The subject was selling handbags; however, the handbags did not have the trademarked logos on them yet. The subject would sell the handbags to his customers and then provide them with the counterfeit trademarked emblem for the customers to place on the handbag themselves. The subject even taught his customers “how to” affix the counterfeit emblems on the handbags properly.

The counterfeiters could not sell their counterfeit merchandise if the items did not have labels, emblems, or the other needed component parts. A consumer most likely will not buy a pirated CD with no artwork or packaging. By allowing subjects to deal in unassembled component parts without the fear of prosecution, we are allowing the counterfeit trade to grow and prosper.

Organized Crime?

I am always asked if I think organized crime is involved in trademark counterfeiting. My answer is “yes.” There is clear and convincing evidence that street gangs, such as 18th Street, MS 13 and others have turned to selling counterfeit merchandise.

Not only are the gangs placing their “soldiers” on the streets selling counterfeit merchandise, they are “taxing” other vendors. These street gangs pay “tribute” to the Mexican Mafia, so you can only imagine what the proceeds from their counterfeit sales are being used for.

Recently, we were involved in an investigation with the Los Angeles Police Department that involved known gang members who were operating a retail store selling counterfeit merchandise and drugs. We have also seen counterfeiting cases associated with other crimes, such as murder, robbery, extortion and other violent crimes.

In 2005, I testified, along with Lt. John Stedman from the Los Angeles County Sheriff’s Department before the U.S. Senate Committee on Homeland Security regarding how the sales of counterfeit merchandise may be funding terrorism. I can tell you that there is clear evidence that counterfeiting is providing funds to terrorist organizations.

The reason gangs and other organized groups are turning to selling counterfeit merchandise is very simple — the large profits and limited risks. By amending our law, you will send a clear message that counterfeiting is not worth the risk.

Counterfeiting is all about the money. If the proposed changes in AB 1394 are made to our law, I strongly believe that this will assist in deterring individuals from becoming involved in counterfeiting activity because it will no longer be seen as a crime that is worth the risk.

Kris Buckner is president of Investigative Consultants, a licensed private investigation company based in Southern California. This guest commentary is based on testimony written in support of CalChamber-sponsored AB 1394
(Krekorian; D-Burbank).