New York Cracks Down on Knockoff Artists

NEW YORK (Feb. 15) – As the high priests and priestesses of the fashion world began Fashion Week, many of them are applauding the city's crackdown on counterfeiters of designer goods. What was seen as a joke for years --- "constabulary theater" in the view of one blogger --- is now starting to show some serious teeth.

New York law enforcement officials swept through the world-famous "counterfeit triangle" in Chinatown shortly before Christmas, seizing $1 million worth of fake designer goods, shuttering 31retail operations and issuing more than $3 million in fines against 33 landlords.

The summonses called the street "a witch's brew of public nuisance."

But the crackdown also has led others, including street hustlers, bargain hunters and gentrification foes, to begin to wonder, glumly: Is Canal Street the next Times Square?

"I see a trend downward in counterfeiting because the mayor's office got involved," Andrew Oberfeldt, a former NYPD SWAT team officer who's now a private investigator fighting counterfeiters, told AOL News. "Maybe they're planning a Disney-fication of Canal Street like they did in Times Square when they chased out the porn parlors.

"The stepped-up counterfeiting enforcement in New York in the last five years has been unprecedented," he continued. "It's like the drug wars --- when they started going after the banks instead of the pushers. If you tell the landlord he's going to lose his building because counterfeit goods are being sold there, that's putting on some pressure."

Much of that pressure emanates from the Mayor's Office of Special Enforcement (OSE), which coordinates efforts by the city's police, fire, health, buildings and finance departments to enforce the "nuisance abatement statute."

"We've started focusing on Canal Street in the past two years," said Shari C. Hyman, director of OSE since 2006, when its jurisdiction expanded from midtown Manhattan to all five boroughs. "We saw safety violations --- locked back rooms, illegal lofts, unstable structures that are fire hazards. We not only go after criminal activity, but also safety concerns.

"And I think we've had a major impact. We know that landlords on Canal Street are much more careful about who they rent to and how they maintain their buildings."

Hyman says the OSE is not connected to the New York City Police Foundation, which has received major financial support from the fashion and licensing industries. That money has financed investigations of trademark infringement.

Many people argue that knockoff designer goods don't hurt anyone --- and people wouldn't be attracted to them if the major fashion houses didn't charge such exorbitant prices for their wares. Heather McDonald doesn't see it that way.

"You're hurting the economy when you buy a knockoff, and taxes are not getting paid," said McDonald, a lawyer who has been prosecuting intellectual property infringement for 24 years. Her firm, Baker Hostetler LLP, has numerous high-end fashion houses as clients. She, in turn, hires Andrew Oberfeldt and other private investigators to gather evidence she can use in court.

"Where was that bag made?" she asked. "Very likely in a sweatshop in China with child labor. Where's the money going? Possibly to fund a terrorist organization."

On its website (www.iacc.org) the International Anti-Counterfeiting Coalition says that counterfeiting is a $600 billion annual industry worldwide, adding: "The profits from counterfeiting have been linked to organized crime, drug trafficking and terrorist activity."

Last summer, as if to signal that it's serious about stanching the spread of knockoff goods, New York City ended its practice of removing logos and giving seized counterfeit clothes to the needy. Now, to the dismay of aid groups, the city burns and shreds the contraband once it is no longer needed as evidence in court proceedings.

Meanwhile, the signs Disney-fication multiply on Canal Street.

It's no longer easy to find a fake Fendi bag or Rolex watch, but soon you'll be able to check into the new 361-room Sheraton hotel. And you can already get cash from the ATM at Bank of America and buy a burger at McDonald's and wash it down with a cup of Starbucks coffee.

Is the franchise machine going to squeeze out the last vestiges of the underground economy and turn Canal Street into another sanitized Times Square?

That will depend on consumers, according to Oberfeldt, the private investigator.

"In this recession you're seeing much less conspicuous consumption, and that's hurting counterfeiters," he said. "If there's no demand, these (counterfeiters) will sell something else. Time will tell. When the economy picks back up, if the counterfeiting doesn't pick back up with it, then there has definitely been a sea change in the minds of consumers."