Wilmington's tourism is attractive to counterfeiters, NC Secretary of State says

Wilmington’s attractiveness to counterfeiters is heightened by its vibrant tourism industry, North Carolina Secretary of State Elaine Marshall said.

“Criminals will set up shop where people have spendable money, places where people go for vacation [or] leisure activities,” Marshall said. “That makes Wilmington more attractive than some other towns [that don’t] have higher sales tax revenue or visitors.”

Marshall created the NC Anti-Counterfeiting Taskforce in the early 2000s, a collaborative effort focused on preventing and ending the illegal sale of counterfeit goods statewide.

Counterfeiting thrives in locations frequented by transient visitors, Marshall said.

“When you can sell to people that are just visitors, they may not come back and complain to the local police,” Marshall said. “If you sell to just the natives, they know how to get a hold of the sheriff.”

What laws prevent counterfeiting in North Carolina?

Russel Nugent, attorney with The Humphries Law Firm, P.C., in Wilmington, provided insight into the laws preventing the sale of counterfeit goods in North Carolina as well as nationally.

“With trademark law you’re typically dealing with the federal statute as well as state common law rights,” Nugent said, adding that the North Carolina statute protecting trademarks mirrors the federal Lanham Act.

“In addition, North Carolina has an Unfair and Deceptive Trade Practices Act (UDTPA),” Nugent said. “Somewhere in the code it indicates that trademark infringement constitutes an unfair and deceptive trade practice.”

Nugent shared why individuals might be motivated to engage in trademark infringement.

“They’re not necessarily aware that somebody else out there has something registered that’s similar, that’s not uncommon at all,” Nugent said.

Additionally, “people from overseas will figure out who is selling well and then they’ll just fabricate that product,” Nugent said, using the popular online shopping platform Amazon as an example.

Marshall agreed that online shopping markets serve as an amplified environment for counterfeiters.

“Online is just a nest for these people,” Marshall said.

Counterfeiting is intertwined with other crimes

Marshall said that the NC Anti-Counterfeiting Taskforce routinely encounters counterfeiting intertwined with other various illegal operations within the state.

“It is not at all unusual for us to find fentanyl, marijuana or other drugs involved in the stash where folks are warehousing what they are selling,” said Marshall, noting this correlation is particularly common in larger counterfeiting busts.

Counterfeiting necessitates organized crime for products to be produced and imported, Marshall said. Profit-seeking remains the paramount concern for these groups, Marshall added, underscoring their motivation to partake in a wide variety of other monetarily lucrative crimes in addition to counterfeiting.

“Their concern is how fast can I get [these products] into the hands of somebody and how fast can I get away with the cash,” said Marshall, emphasizing that a focus on consumer safety is entirely absent in the production and sale of any item by these groups.

Wilmington witnessed its latest counterfeiting crackdown in October, when local law enforcement seized counterfeit-packaged THC products, weapons, and other illegal substances from a local gas station.

More: Counterfeit packaged THC snacks and weapons seized from Wilmington business

Marshall said she worries specifically about these kinds of counterfeit-packaged products, particularly those containing drugs, and their appeal to children.

“Three children...[ate] gummies on their school bus in Cumberland County and all three of them [were sent to] Cape Fear Valley [Medical Center],” said Marshall, adding she worries the incident might be related to counterfeit CBD or THC packaged products. “When you add attractive deceptive packaging...kids are very vulnerable.”

Marshall said there are a wide variety of other safety complications with counterfeiting, highlighting an instance where individuals developed rashes after using counterfeit perfume in New York due to bacterial contamination.

Counterfeiting is also deeply connected to human trafficking and forced labor, according to U.S. Customs and Border Patrol.

Marshall agreed, citing instances where individuals have been forced to sell counterfeit goods.

“[People] are kept in work camps and sent out to sell counterfeits on the street every day,” Marshall said. “You see it in Italy a lot.”

This reality also exists here in North Carolina.

“We had one case here [in the Piedmont of North Carolina] where we had so many other [criminal] violations that we turned it over to the Feds immediately,” Marshall said. “We believe that the women involved were held captive to sell goods,” adding a disclaimer that the results of this case have not yet been determined.

The NC Secretary of State also said that proceeds from counterfeiting have fueled other heinous crimes globally.

“The [2015] bombing of the Charlie Hebdo magazine [in Paris] was supported by folks that did counterfeits,” Marshall said.

Advice to consumers

Marshall provided advice to North Carolina buyers in avoiding counterfeit products, especially during the holiday shopping season.

“Folks are going to try to buy every last toy that their kids have wanted, they’re stretching their money as far as it will go,” Marshall said. “I just want to caution them...buy from legitimate merchants, these things are harmful.”

Common counterfeit items sold across North Carolina include purses, tennis shoes, cosmetics, cleaning agents, toys, and electrical hardware, among others, Marshall said.

“Look for trusted vendors,” Marshall said. “Anytime anything [takes you] to a third party, you need to check that third party out before you deal with them.”

When shopping online, if the spelling, grammar, or spacing is wrong on a webpage, these are indicators that the site is not legitimate, Marshall said.

In preventing harm caused by the sale of counterfeit goods, “education against counterfeits and the damages that they can cause is absolutely our best defense,” Marshall said.

Since its foundation, the NC Anti-Counterfeiting Taskforce has worked 7,550 cases and has taken more than $190 million in counterfeit items off the streets of North Carolina, Marshall said.

Alcohol Law Enforcement, multiple local law enforcement agencies and departments, the U.S. Department of Homeland Security, the U.S. Attorney’s Office, businesses, and luxury brands work alongside the taskforce in combating counterfeit sales statewide.

This article originally appeared on Wilmington StarNews: Wilmington counterfeiting: motivations, links to crime, and prevention