An international counterfeiting ring shipped hundreds of millions of dollars worth of counterfeit sneakers to the United States using an elaborate web of fictitious company names, bogus paperwork, phony email addresses, and burner phones. That’s according to a now-unsealed federal complaint, which says the fake Nike and Louis Vuitton footwear would be worth more than $472 million if it were real.
It was a larger-than-usual bust for US authorities, who have broken up several large sneaker counterfeiting operations in recent months. Last year, the feds busted a New York-based counterfeiting ring they say smuggled 385,280 pairs of imitation Air Jordans into the country, potentially costing Nike more than $70 million in lost revenue. In October, federal agents arrested a Queens man they say shipped more than $5 million worth of fake Timberland and Ugg boots from China into the New York City area. The same month, US Customs and Border Protection (CBP) officers intercepted 14,806 pairs of counterfeit Nike Air Jordans, which would have been worth $2.2 million, had they been genuine.
Worldwide sales of knockoff goods exceeded $520 billion last year, representing 3.3% of all global trade.
“People often make the mistake of believing that purchasing counterfeit items are a victimless crime,” one CBP official said after a recent bust. “However, these items often fund national and transnational criminal organizations, and cost taxpayers billions.”
In this latest case, the counterfeiting crew allegedly used slightly altered versions of actual company names to make their shipping paperwork look legit. Once the cargo cleared US customs, the 40-foot containers didn’t go to the addresses listed on the manifests—which falsely claimed the shipments were made up of everyday household items like ventilation fans—but rather to various self-storage facilities in Brooklyn, Queens, and Long Island, NY, where the boxes of phony sneakers were broken down into smaller quantities to be sold. Investigators eventually linked a total of 129 shipping containers containing bogus shoes to the same organization.