The Counterfeiting Epidemic

In Southern California alone, $1 million worth of knockoff toys and electronic games were seized last year. This year, the number of counterfeit toys is expected to increase, hurting both U.S. manufacturers and consumers.

In 2004, the number of containers entering the country through Long Beach and Los Angeles increased by 26 percent, according to James Purser, assistant port director of trade operations for the Los Angeles and Long Beach seaports with U.S. Customs and Border Protection. He expects double-digit growth again this year, and with it, the influx of more counterfeit products.

Most imitation toys enter the United States through ports in New York, Long Beach and Los Angeles, with China standing out as the largest producer of these knockoffs.

New York’s Canal Street and Los Angeles’s Toy District are wrought with counterfeit goods.

These products don’t have to comply with safety standards, and in fact “many counterfeit toys use lead based paint," according to Sgt. R.J. Acosta, vice supervisor for the Los Angeles Police Department´s Central Division, which encompasses the city´s Toy District.

In the past two years, the LAPD´s Central Area Vice Unit has recovered $37 million in counterfeit material. To help remedy the situation, they have installed two cameras – with eight more on their way - that allow officers to monitor the Fashion and Toy Districts.

Vice officers seized over $1 million in counterfeit goods during a recent raid on Focus Century (USA) Inc.´s warehouse on Fourth Street, Acosta says. The knockoff products included BRATZ, Spider-Man and Disney toys.

U.S. Customs had previously seized over 250,000 units of counterfeit merchandise being imported by Focus Century and its subsidiaries.

In another sweep, U.S. Immigration and Customs Enforcement agents seized 350 cases of counterfeit Yu-Gi-Oh! trading cards from a warehouse in Vernon, Calif., where a company called J.S.K International rented space.

The cards, which are distributed by Upper Deck , would retail for about $3 million if they were genuine. ICE agents believe the fake cards were manufactured in China.

ICE spokeswoman Virginia Kice says ICE agents obtained a search warrant for the warehouse after a vendor in downtown Los Angeles offered to sell an ICE undercover agent 250 cartons of counterfeit Yu-Gi-Oh! cards for more than $36,000.

“Fake cards put a negative connotation in consumers’ minds that what they are buying isn’t real,” says Upper Deck spokesman Don Williams. “It cheapens our brand and hurts our retail partners.”

Williams says that the company works with local and federal authorities to investigate and arrest those involved in distributing or selling counterfeit Upper Deck products. Last year, counterfeit Upper Deck products were seized in Los Angeles and Florida.

“We’ve also had them seized in Spain and Italy,” Williams says. “We are truly chasing counterfeiters globally.”

Jules Andres, senior manager of corporate communications with Mattel, says the company aligns its anti-counterfeiting efforts with the toy industry worldwide.

"Mattel aggressively protects its brand by pursuing and prosecuting those involved in the production, distribution and sale of counterfeit Mattel products and licensed goods," says Andres.

To learn more about what is being done to combat the counterfeit toy problem, click here read a sneak peek of next month’s article, Steps Toward a Counterfeiting Solution.