Ever wonder where those counterfeit designer True Religion jeans and colorful Polo Ralph Lauren polo shirts came from? While most people assume that they are made cheaply overseas, this week the New Jersey State Police announced detectives from the New Jersey State Police Cargo Theft Unit closed a large counterfeit trademark factory operating out of Passaic. Detectives also arrested Wan Kim, 52, of Ridgefield, N.J. Kim was charged with possession and manufacturing of counterfeit trademark items.
Churning out what Colonel Rick Fuentes, superintendent of the New Jersey State Police, called “millions of dollars worth of clothing,” the factory’s workers ripped off expensive designer fashions like Lacoste, Ed hardy, North Face and Sean John as well as NBA licensed apparel.
While those designers sink millions each year into designing their fashions and building their brands, counterfeiters like this one enjoy higher profit margins by selling lower quality goods with counterfeit neck labels and price tags at slightly lower prices. The result is that fashion labels lose millions of dollars each year to this sort of fraud. Although disgruntled consumers might sniff at the price of a designer pair of jeans, which can easily top $200, the cost of designing those jeans without the resulting revenue from the sales of jeans that are being bought from counterfeiters instead of from authorized sellers of genuine designer jeans is what keeps the prices so high.
During the raid on the Passaic factory, the New Jersey State Police detectives seized more than 15,000 pieces of alleged counterfeit trademark clothing that, had it been genuine, would be valued at $1.6 million. They also seized over 100,000 neck labels, which are used by the counterfeiters to give the appearance of a genuine designer article. The result is a shirt that consumers may be willing to pay more than $100 for, rather than the few dollars that it cost to make.
Although New Jersey Gov. Chris Christie has made it clear that he wants to bring new business to New Jersey and keep current businesses here, that desire only extends to those with legal operations. Fuentes has made it clear that he wants this most recent counterfeit operation’s shutdown to serve as a warning. It will have to be one with pretty steep consequences since, in recent years, New Jersey’s flea markets have become prime selling opportunities for counterfeit goods.
The Associated Press reported last year that the same New Jersey State Police Cargo Theft Unit had been working to crack down on sales of counterfeit goods in New Jersey, seizing $300,000 in goods at a Springfield, New Jersey flea market that included designer goods as well as potentially dangerous household items like batteries, perfumes and electronics. Overall, Robert Barchiesi, president of the International AntiCounterfeiting Coalition, estimates that 80 percent of counterfeit items come from China, with all counterfeiting activities costing the U.S. economy more than $200 billion in revenue and 750,000 in jobs each year.