Exploding airbags turning dashboards into shrapnel. Pills purporting to be Viagra filled with printer ink and rat poison. U.S. submarines filled with fake electrical circuits.
These are just a few of the consequences of the international counterfeit industry displayed at a sobering new exhibit, Counterfeit Crimes: Are You Part of the Black Market? at the popular Crime Museum in Washington, D.C.
Most people think of counterfeiting as the fake bags and sunglasses displayed in the streets of cities all around the world, or the bootleg versions of games and movies downloaded for little to no cost from shady websites. In those instances, the companies that make the real products—the Louis Vuitton bags and blockbuster movies—seem to be the losers. The money they spent on researching, designing, and marketing their goods is lost to a cheaper knockoff. (And, indeed, some of the companies who are often being ripped off in these counterfeiting scams are sponsors of the exhibition, including Pfizer, Microsoft, Underwriters Laboratories, Entertainment Software Association, Oakley, and the IPR Center, a division of the U.S. Immigration and Customs Enforcement.)
“Companies aren’t the only ones threatened by counterfeit goods,” declares Bob Barchiesi of the International Anti-Counterfeiting Coalition, which partnered with the museum for the exhibition. “There’s a public safety aspect that poses a real and present danger.”
The impact on public safety is wide-ranging. On a personal level there are drugs and toys that are extremely unsafe. Pfizer’s Viagra, for instance, is one of the most counterfeited drugs in the world. The reason is obvious: If you order the drug off of a website, there is no shame factor. However, the labs used to make these pills aren’t inspected, and the pills themselves are filled with unknown chemicals. INTERPOL reported finding rat poison in counterfeits, while Pfizer in its own tests has found floor wax. To give Viagra its iconic blue color, the counterfeiters often use printer ink. For Cialis, it’s lead highway paint. Potentially just as dangerous, a significant portion of the counterfeit drugs (32.1%, according to the WHO) have no active ingredients, which can have serious consequences for patients using these drugs to treat life-threatening illnesses. In 2008, the drug heparin was tied to dozens of deaths after most of the active ingredient was swapped with a counterfeit. According to the FDA website, counterfeit medicines have been linked to everything from Tamiflu, Altuzan (a cancer drug), Adderall, weight-loss drugs, and Vicodin.
Counterfeit airbags and brake pads have become more of a problem, as have electrical devices that catch on fire. The NHTSA released a guide of people vulnerable to the airbags, as well as the makes of vehicles that have been affected. The list includes those who have had airbags replaced in the past three years at a repair shop not affiliated with a new-car dealership, owners of used cars that have had an air bag deploy prior to purchase, or those who have bought the replacement air bags online, often at low prices.
One of the scariest tales shared in the exhibit involves the U.S. military.
Just this month, a man pleaded guilty to selling thousands of integrated circuits (i.e. microchips) that ended up in the supply chain of contractors for U.S. nuclear submarines. The man had told customers that the chips were made in Europe and had placed fake labels of Motorola, Xilinx, and National Semiconductor on them, when in fact they were made in China. Luckily, the U.S. Navy caught the fraud during testing.
In a second case, the CEO of a battery distributor was convicted of selling $2.6 million in counterfeit batteries to the Defense Department. The batteries, which were made on-the-cheap in China and did not actually come from the approved manufacturer, were supposed to back up power on nuclear aircraft carriers, minesweepers, and ballistic submarines. Some of the batteries were installed on multiple vessels.
Located in the former studio of America’s Most Wanted, the exhibition walks visitors through a variety of counterfeits, including medication, sports jerseys, luxury bags, video games, and children’s toys. What becomes remarkably clear is that, for the casual consumer, it is nearly impossible to tell from a glance the difference between real and fake. One window showing bags from Longchamp, Ugg shoes, and Canada Goose Jackets mixed with their ersatz doubles captures how tricky the fraudsters are.
Rarely has the influence of a museum been so heavily endorsed. Many of the top law enforcement agencies were represented at the exhibit’s opening ceremony, in addition to major pharmaceutical and technology companies. Much of the discussion focused on hopes that the exhibition will begin to shift public perception about counterfeit goods.
“The federal government cannot fight counterfeit crime alone,” explained Deputy Attorney General James Cole, who spoke at the opening. The phrase tossed around by more than one speaker was that “You can’t arrest or seize your way out of the problem.” Essentially, as long as consumers are willing to buy counterfeit goods, and don’t think about the broader repercussions, the government is limited in its ability to stop their flow.
The exhibition, therefore, looks at the broader effect of the counterfeit industry. Multiple sections explain how the money used to purchase counterfeit goods, while cheaper, ends up in the hands of organized crime. It points out that there are no controls on human trafficking and child labor when it comes to the production of the goods. In addition, it makes the argument that these purchases are a societal ill, as they take away much needed tax dollars that could be used to help schools, law enforcement, and or other government programs. New York City alone, the show claims, loses $1 billion in taxes a year to the counterfeit industry. The exhibition also warns that people who buy these goods are giving their credit and financial information to less-than-wholesome individuals, and often frequenting websites with malware.
However, the show has one small weakness. Many of the corporations affected by counterfeiting engender a widespread lack of sympathy and trust in the general public. While the signs warning of child labor and organized crime are ubiquitous, the nearly daily headlines about forced labor or some other scandal in legitimate company supply lines undercuts that message. So too in the medicine section, where one can’t help but think about the high prices of drugs in the U.S. and laws banning reimportation of drugs from countries where they cost less.
Despite these issues, the exhibit conveys a powerful message about the impact—and even danger—of counterfeit goods. So watch out, Canal Street vendors, you may be getting an earful about your fakes from your former customers in the coming months.