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Amazon Intercepts Hugo Boss, Puma Knockoffs in Massive Counterfeit Bust

The world’s greatest governments and industries have largely thrown up their hands in the fight against intellectual property theft and the selling of counterfeit products, especially when the bad actors reside in China.

But rather than shrug its shoulders at this problem without a solution, U.S. retail giant Amazon is putting its homegrown crime-busting force to work taking the fight right to the purveyors of cheap knockoffs.

Amazon’s Counterfeit Crime Unit (CCU) put another feather in its cap this week as Wednesday morning the the retail giant announced that law enforcement officials in China had raided three operations and seized more than 240,0000 counterfeit items in the Guangdong and Jiangxi provinces.

Photos of the merchandise—luxury sports and automotive items—taken by Chinese authorities after the raid look not unlike hauls seized by DEA agents at an underground drug bust.

The seizure prevented the fake products from reaching Amazon customers or being sold elsewhere in the supply chain, the company said in a statement. These seizures of counterfeit goods based on intelligence from Amazon follow similar actions by law enforcement in England as well as efforts in California and New Jersey.

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The CCU alerts and works with local law enforcement when it becomes aware of counterfeit operations involving Amazon vendors.

“Our efforts to identify and dismantle counterfeit organizations are working,” said Kebharu Smith, associate general counsel and director of the Amazon Counterfeit Crimes Unit. “We appreciate law enforcement acting on our referrals and thoroughly pursuing these cases. These outcomes protect Amazon customers, disrupt the counterfeit supply chain, and halt their illicit proceeds.”

According to Amazon, the seizure by Chinese Public Security Bureaus (PSB) included “more than 130,000 counterfeit car accessories and fake brand labels that infringed on many brands’ intellectual property including BMW, Porsche, and General Motors; nearly 80,000 counterfeit luxury products; and more than 30,000 pieces of counterfeit clothing and fake brand labels that infringed on Hugo Boss, Puma and Under Armour’s intellectual property among others.”

Amazon says it has also cooperated with local PSBs in China on operations involving bad actors that illegally purchased government-issued personal identities and business licenses in an attempt to register fraudulent Amazon seller accounts. As a result, 84 individuals were detained. Last year, Amazon says it stopped more than 2.5 million attempts by bad actors around the world to create new selling accounts, preventing them from listing a single product for sale.

Amazon works across the globe to fight counterfeiters, recently filing joint lawsuits with well-known brands, including CartierGE AppliancesWWESalvatore Ferragamo, and FELCO. Through its partnership with brands, Amazon’s CCU constantly uncovers new approaches counterfeiters take to try to deceive customers and evade the law, the company says. The CCU uses that intelligence to equip law enforcement to pursue bad actors.

In 2021, the CCU sued or referred for investigation over 600 criminals in the U.S., UK, EU, and China.

The CCU program began in 2020 and remains the only known private-industry enforcement tool of its kind in retail. Smith, the only counsel and general director the program has had, has an extensive history as a state and federal prosecutor.

On a busy day of traveling, Smith took time to respond to questions from Sourcing Journal via email, though he declined to comment on how the seizure ranked relative to Amazon’s other interceptions.

SJ: What is the process like working with authorities, especially Chinese PSBs? Are they generally cooperative with foreign business interests, or do they require some cajoling to take action?

Smith: Amazon shares intel on confirmed bad actors with law enforcement. We appreciate the great individuals in law enforcement around the world. They need more resources to pursue these criminals and act on intel.

Our shared goals are to shut down these criminal networks by disrupting their counterfeit operations, stopping their illicit proceeds and eliminating fake goods from the overall supply chain.

SJ: What year did the CCU program begin? How has it grown? and how much personnel and training is involved?

Smith: Amazon’s Counterfeit Crimes Unit (CCU) launched in 2020 and is made up of machine learning scientists, software developers, expert investigators, and more. It is one part of our broader efforts to protect our store with over 12,000 people worldwide. In 2021, we invested over $900 million in people, technology, tools, and programs to protect our store from fraud.

SJ: Is the CCU unique to Amazon or do other retailers have similar units, that you know of?

We are proud of the work that it took to build out the CCU team, which is comprised of former federal prosecutors, investigators and agents, and data scientists. It is a collection of subject matter experts who are dedicated to stopping counterfeiters. We are not aware of any other retailer that has a comprehensive unit like the CCU.

SJ: What would you say to people who might say cheap knockoffs are a victimless crime? 

Smith: Intellectual property theft is not a victimless crime. Manufacturers, brands, retailers, their employees, and consumers are all negatively impacted by counterfeiting. Counterfeiters deprive brand owners of the value of their intellectual property and compete unfairly with honest entrepreneurs. 

Counterfeiting is also sometimes a predicate crime to far more nefarious activity, such as drug trafficking, child exploitation, and terrorism. While counterfeiting is illegal in most countries, for too long counterfeiters have not been held accountable for their crimes.

SJ: What sort of impact have these raids and seizures had on the integrity of the global marketplace so far?

Smith: Amazon strictly prohibits counterfeit products in our store. We know that trust is hard to earn, and easy to lose, which is why we are so focused on creating a trustworthy shopping experience each and every day.The raids and seizures have helped protect Amazon’s customers and consumers beyond our store, by preventing the fake products from entering the supply chain and reaching shoppers.