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Counterfeit Industry Tied to Organized Crime, Terrorism

LOS ANGELES — Fake designer brand purses, clothing and even prescription medications are made and sold around the world. Investigators say it is bigger business than the illegal drug trade. And police say that when consumers buy counterfeit items, they could be contributing to the funding other crimes. Many of the counterfeit items from the Pacific Rim enter the United States through Los Angeles.

Bargain hunters flock to downtown Los Angeles and an area called Santee Alley, where clothing, sunglasses, watches and toys pack tiny stores block after block. Santee Alley is also known as a haven for counterfeit goods.

Anita Grey has been shopping at Santee Alley for years. She says she would never buy fake designer products, but she has seen them.

“I know years ago when I come down, you would see it. And now, you don’t see it at all," said Grey.

Investigator Kris Buckner says that is because police have raided stores that carry fake designer goods so many times that people who sell them are more careful.

“They’ll come up and offer you the goods, and then they’ll take you to a warehouse," said Buckner.

For the last 15 years, Buckner has been tracking down people who sell and make counterfeit products. He says the problem is not limited to downtown Los Angeles.

“You got to look at the global marketplace," he said. "It’s estimated that 10 percent of the goods you’ll see out there are estimated to be counterfeit.”

Buckner says the estimated $500 billion a year counterfeit goods business is bigger than the illegal drug trade, and that it is tied to local streets gangs and international organized crime.

“Then you have groups that have ties to Hezbollah, Muslim Brotherhood and Hamas that have engaged in this activitt, " he said. "The problem is it’s a perfect opportunity for these guys to make money.”

Buckner says criminal elements often make fake goods in the United States in underground sweatshops.

“They will traffic undocumented folks to the U.S. and force them to work in these situations until they pay their fee to come here to the United States," said Buckner.

Deborah Greaves with the designer brand True Religion Jeans warns against buying fake goods on the Internet.

“One of the biggest threats that people need to be aware of now is that with the online counterfeiting is that these [groups] not only are selling you a fake product, but they’re also harvesting all of your personal information," said Greaves. "They have your credit card; they have your address. They have everything they need to steal from you.”

At the Port of Los Angeles, police seize counterfeit purses, clothing, prescription medications, appliances and cigarettes. Investigators say large amounts of the fake and stolen designer items come from China through ports across the United States, smuggled inside shipping containers. Police say that in this port complex alone, more than 14 million containers arrive every year, but they are able to check fewer than 1 percent of those containers.

Deborah Greaves trains law enforcement officers and shows them the differences between a real and fake True Religion Jeans.

“The fabrics are rougher; the stitching is not as neat," she said.

Besides the difference in quality, some of the counterfeit products are harmful, says Commander Todd Rogers with the Los Angeles County Sheriff’s Department.

“When you have counterfeit cigarettes, you don’t even know what the contents are," said Rogers. "And I understand that feces have been found in some of these cigarettes.”

Police say that to tell the difference between an authentic product and a counterfeit one, look at where the item is sold and whether the price seems too good to be true. It so, it probably isn't real.