Category: Articles

USA-IT partners discuss the dangers for online shoppers and the widespread, dangerous impacts it has
society.

Jennifer Hanks, director of brand protection for the American Apparel and Footwear Association:

“Hanks, director of brand protection with the American Apparel and Footwear Association (AAFA), said thousands of consumers are falling for these counterfeit product pitches. She spoke to us during a national conference on counterfeiting and the sale of illicit goods in Washington, D.C., hosted by United to Safeguard America from Illegal Trade (USA-IT), a private-public partnership to fight the problem. There is a ‘destructive value chain across commerce,’ she said. ‘It’s the fraudulent advertising that is posted on social media. The dupe social influencers are adding hidden links that take consumers offline to fake websites.’”

Alysa Erichs, USA-IT Spokesperson:

“And many times, money from counterfeit goods is not just going to a bogus manufacturer. According to USA-IT spokesperson Alysa Erichs, formerly acting assistant director with Homeland Security, money from fake goods may be funding human traffickers, drug smugglers, and even terrorists.

“‘The internet is obviously the vehicle to shop for legitimate products, and it’s being flooded with illegitimate products,’ she said. ‘While people may think, ‘What’s the harm?’ that they’re getting a bargain, they don’t understand what is happening down the road.’”

“‘So, if you multiply that one click by how many people are purchasing and the money made from the
product and where that money is going, it’s not your onesie, twosies. It’s going to an organization, an organization that is, in some cases, sophisticated enough to manufacture a product and have it shipped into this country. This is not your next-door neighbor who is putting a bag together in his basement. This is full production.’”

Read more here.

More than 200 victims of sex trafficking were rescued during a nationwide enforcement campaign last month that also included the identification or arrest of more than five dozen suspected human traffickers and 126 individuals accused of child sexual exploitation and trafficking offenses.

The FBI-led “Operation Cross Country,” which involved nearly every FBI field office and their respective state and local partners, also located 59 minor victims of child sex trafficking and sexual exploitation, and another 59 children who had been reported missing.

The two-week law enforcement initiative—now in its 13th year—is a coordinated operation among the FBI, other federal agencies, state and local police, and social services agencies across the country to find and assist victims of human trafficking, particularly child victims. Law enforcement agencies conduct targeted operations to identify traffickers, their networks, and their victims. FBI victim specialists, working alongside local agencies, then provide immediate support and access to the extensive resources that are available to all federal crime victims. The National Center for Missing and Exploited Children (NCMEC) is a significant partner in the initiative. The private non-profit is a clearinghouse of information and has assisted in more than 400,000 cases of missing kids who were recovered since its founding in 1984.

“Human trafficking is a grave violation of human rights that preys on the most vulnerable members of our society,” FBI Director Christopher Wray said in an August 1 announcement of the arrests and recoveries. “The FBI’s actions against this threat never waver as we continue to send our message that these atrocities will not be tolerated.”

FBI Child Exploitation and Human Trafficking Task Forces across the country work throughout the year to locate victims and their traffickers. Often, victim specialists are embedded in operations. They serve as a liaison between the victims and FBI agents. They also help victims find services to rebuild their lives. The FBI’s Victim Services Division has a team of child and adolescent forensic interviewers, or CAFIs, who are specially trained interviewers skilled at gathering evidence without further traumatizing children and others with mental or emotional disabilities. These multi-disciplinary teams work with state and local partners to make resources available for victims, which might include counseling, medical services, housing, or job placement.

“Our victim specialists, victim service coordinators, child and adolescent forensic interviewers, and other victim service professionals work collaboratively with special agents to ensure a trauma-informed, victim-centered approach is taken when engaging with victims,” said Regina Thompson, assistant director of the Victim Services Division. “This is especially important when engaging with victims of human trafficking as it is a very complex, traumatic crime.”

Operation Cross Country grew out of a 2003 FBI initiative to identify and recover minors who have been sexually exploited. While the national sweeps draw attention to the issue of trafficking, the FBI and its partners work to investigate and stop trafficking every day.

“Behind every statistic, there is a person with dreams, aspirations, and the right to live a life free from child sex trafficking and exploitation,” said NCMEC President and CEO Michelle DeLaune. “We applaud the FBI and their partner law enforcement agencies for their unwavering dedication to protecting children.”

The American Apparel & Footwear Association — a champion of safe workplaces, consumer protection, and brand protection — thanked Senator Chris Coons and Senator Charles E. Grassley for recognizing August as ‘‘National Anti-Counterfeiting and Consumer Education and Awareness Month.” This calls crucial attention to the importance of trademarks in the economy and the role of trademarks in protecting consumer safety.

“Through better education and more effective public policy, we must all work to combat counterfeiting. The seemingly insatiable appetite for fake goods, combined with the relative ease through which these knockoffs are found on third party marketplaces, means more Americans than ever before are exposed to dangerous and irresponsibly produced goods. AAFA and our brands continue to work alongside Congress, the U.S. Trade Representative, U.S. Customs and Border Protection (CBP), and other partner agencies as we aim to stem the growing problems from such illicit products. AAFA appreciates the constructive dialogue and tireless contributions of our Brand Protection Council members as we champion American innovation and brand protection, consumer safety, worker safety, and responsible product manufacturing,” said AAFA President and CEO Steve Lamar.

On July 27, Congress posted S.Res.325 — a resolution designating the month of August as “National Anti-Counterfeiting and Consumer Education and Awareness Month.” In particular, this resolution emphasizes:

– The importance of public awareness.
– The need to “safeguard consumers and businesses from unsafe and unreliable products that, through illicit activity, threaten intellectual property rights, the economic market, and even the health and well-being of consumers.”
– The growth of both global commerce and electronic commerce and ever-evolving deceptive tactics, as a means to accelerate the problem.

AAFA also applauds Senator Chris Coons for remarks on July 26 – during the Senate Judiciary Subcommittee on Intellectual Property (transcript, video) – where he stated, “… I’m planning to soon reintroduce, along with Senator Tillis, the SHOP SAFE Act to protect consumers from harmful counterfeit goods sold online…”

AAFA member products – apparel, footwear, and related goods – continually remain at the top of the counterfeit items seized by CBP year after year. The sale of counterfeit clothes, shoes, and travel goods not only hurts U.S. companies, but the millions of American workers they employ.

AAFA is an outspoken advocate for the proposed SHOP SAFE legislation; in addition to the recently enacted INFORM Consumers Act, as the association strives to stem the influx of illicit products and educate about the alarming dangers of counterfeits that extend across industries.

USA-IT partner Philip Morris International and County Attorney for Maricopa County Rachel Mitchell pen a joint op-ed on the important role public-private partnerships play in combating illegal trade.

“Working with United to Safeguard America from Illegal Trade, also known as USA-IT, has allowed Arizona and Maricopa County to better understand national trends and provide critical information to business owners, policy makers, and community leaders about how to best protect our community.”

“We are proud to partner with USA-IT and their efforts to create national partnerships between public and private sectors to address this critical issue. Combining the expertise of more than 85 organizations, they are leading the way to protect retail business across the country.”

“Counterfeiting, organized retail crime, and illicit trade are a real and growing threat to Arizona businesses, Arizona taxpayers and Arizona families. Solid relationships between community partners – business leaders, trade alliances, law enforcement, and prosecutors – are our best bet for creating strong policies and taking strong action to crack down on and punish the perpetrators of these crimes.”

Read more here.

LOUISVILLE, KY— May 8 was a busy night for U.S. Customs and Border Protection (CBP) officers in Louisville. CBP officers in Louisville seized three shipments containing various luxury items. From handbags, to jewelry, to Rolex watches, all were deemed to be inauthentic and bearing counterfeit marks, by CBP’s Centers of Excellence and Expertise, the agency’s trade experts.

CBP officers examined all three shipments to determine the admissibility of the goods and discovered they all contained inauthentic luxury items. The first shipment contained 1,438 necklaces bearing counterfeit Van Cleef & Arpels trademarks. The necklaces, arriving from Hong Kong and heading to a residence in Miami, would have been worth a total of $2.18 million, Manufacturer’s Suggested Retail Price (MSRP), had they been genuine.

CBP officers inspected a second parcel originating from Hong Kong and found 10 fake Rolex watches. This shipment was heading to a residence in Ontario, Canada. Had the watches been real, the MSRP would have been worth a total of $102,500.

The final package was also from Hong Kong and was headed to a P.O. Box in Laredo, Texas. Inside, officers found 14 fake Louis Vuitton handbags, and over 1,400 pairs of earrings bearing inauthentic logos representing Chanel, Gucci, Louis Vuitton, Tiffany & Co., Versace, Tous, Tory Burch, and Disney brands. Officers also found over 200 necklaces bearing inauthentic logos representing Chanel, Gucci, and Louis Vuitton brands. The MSRP for this shipment would have been $812,510, had the goods been authentic.

“These types of seizures happen every night. Our officers are very well trained and vigilant in stopping these illegal shipments from reaching their destinations,” said LaFonda Sutton-Burke, Director, Field Operations-Chicago Field Office. “Whether it is Intellectual Property Right violations, narcotics, unapproved items or counterfeit products our officers will continue to protect our local communities and our ports of entry.”

The rapid growth of e-commerce enables consumers to search for and easily purchase millions of products through online vendors, but this easy access gives counterfeit and pirated goods more ways to enter the U.S. economy. U.S. consumers spend more than $100 billion every year on intellectual property rights (IPR) infringing goods, falling victim to approximately 20% of the counterfeits illegally sold worldwide. Counterfeit costume jewelry bearing famous brands such as Chanel, have been found to contain lead and other toxic materials which are dangerous to human health.

“This is just another example of the work our officers do to protect consumers and the U.S. economy,” said Thomas Mahn, Port Director, Louisville. “As consumers increasingly purchase from online or third-party vendors, our officers are at the frontline to guard against defrauders expecting to make money selling fake merchandise.”

CBP has established an educational initiative to raise consumer awareness about the consequences and dangers associated with purchasing counterfeit and pirated goods online or in stores. More information about this initiative is available at www.cbp.gov/fakegoodsrealdangers. To report suspected counterfeits, visit CBP’s online e-Allegations portal or call 1-800-BE-ALERT.

Brand owners wishing to partner with CBP to prevent the importation of counterfeit and substandard goods should visit https://iprr.cbp.gov/s/ for information about the e-Recordation program.

For more ways to protect yourself from counterfeit and pirated goods, visit https://www.stopfakes.gov/.

Follow CBP on Twitter @CBPChicago and @DFOChicago.

A little over two weeks ago, I announced that the Justice Department had taken significant enforcement actions against the largest, most violent, and most prolific fentanyl trafficking operation in the world: the Sinaloa Cartel.

I said then that the Justice Department is doing everything in our power, and using every authority we have, to bring those responsible for the fentanyl epidemic to justice.

That includes holding accountable the drug traffickers who use the dark web to commit their crimes.

Drug traffickers are increasingly turning to the dark web to sell illegal drugs in exchange for cryptocurrency. They may advertise their drugs on darknet marketplaces as brand name pharmaceuticals. But in reality, the pills are often counterfeit and laced with fentanyl.

The drug traffickers are confident that, by operating anonymously on the dark web, they can operate outside the bounds of the law.

They are wrong.

I am joined today by FBI Deputy Director Paul Abbate, DEA Principal Deputy Administrator Lou Milione, Chief Postal Inspector Gary Barksdale, IRS-CI Chief Jim Lee, and FDA Investigative Services Division Chief Daniel Burke.

We are here today to announce the results of an unprecedented international enforcement operation led by the FBI – known as Operation SpecTor – against traffickers of fentanyl and other drugs who operate on the dark web.

Operation SpecTor was a coordinated international law enforcement effort, spanning three continents, to disrupt drug trafficking on the dark web.

It involved agencies across the federal government, along with our partners at Europol and Eurojust, and law enforcement agencies in eight foreign countries. It was led by the Department’s Joint Criminal Opioid and Darknet Enforcement – or JCODE – team.

Across the U.S. and eight other countries, Operation SpecTor resulted in a total of 288 arrests and the seizure of 117 illegal firearms, 850 kilograms of drugs, and $53.4 million dollars in cash and cryptocurrency.

This represents the most funds seized and the highest number of arrests in any coordinated international action led by the Justice Department against drug traffickers on the dark web.

Here in the United States, our Operation SpecTor investigations involved the FBI, DEA, ATF, and more than 30 U.S. Attorneys’ offices – as well as our partners at other federal agencies.

In the United States, we arrested 153 defendants, seized 104 illegal guns, and seized over 200,000 pills, including those containing fentanyl.

To give just three examples of the cases that made up this massive operation since it began in October 2021:

In the Central District of California, a defendant was charged with drug and weapons offenses for his role in leading an organization that obtained bulk fentanyl; operated labs that used high-speed pill presses to create pills containing fentanyl and methamphetamine; and sold millions of pills to thousands of customers on the darknet.

In the Southern District of Florida, we secured the conviction of an individual who distributed narcotics, including fentanyl, on various dark web marketplaces. That defendant possessed a list of over 6,000 customers across the United States.

And in the Eastern District of California, two individuals were charged with drug and money laundering offenses for their role in selling tens of thousands of counterfeit oxycodone pills containing fentanyl in exchange for cryptocurrency on the dark web.

I am extremely grateful to the agents, prosecutors, analysts, and staff across the Department who participated in this operation –including the FBI and its JCODE team, the DEA and ATF, our U.S. Attorneys’ Offices and OCDETF, and multiple sections of the Criminal Division – including the Computer Crime and Intellectual Property Section,  the Money Laundering and Asset Recovery Section, the Narcotic and Dangerous Drug Section, the Fraud Section, and the Office of International Affairs.

I also want to thank our partners across the federal government for their assistance in this operation – including the U.S. Postal Inspection Service, IRS Criminal Investigation, Homeland Security Investigations, U.S. Customs and Border Protection, the Naval Criminal Investigative Service, the FDA Office of Investigations, and the Treasury Department’s Financial Crimes Enforcement Network.

I am likewise grateful to our partners at Europol and Eurojust, and to our law enforcement partners in Austria, France, Germany, the Netherlands, Poland, Brazil, the United Kingdom, and Switzerland – without whom this operation would not have been possible.

The Justice Department is cracking down on criminal cryptocurrency transactions and the online criminal marketplaces that enable them.

In 2021, Deputy Attorney General Lisa Monaco announced the results of another international operation, Operation DarkHunTor, which involved the arrests of 150 Darknet drug traffickers and the seizure of $32 [million] in cash and cryptocurrencies.

Last year, together with our German law enforcement partners, we seized Hydra Market, the world’s largest and longest-running illegal marketplace on the dark web.

Earlier this year, we led a coordinated international operation against Genesis Market, a major criminal marketplace that enabled cybercriminals to victimize individuals, businesses, and governments around the world.

And today, we have announced an unprecedented international enforcement action against drug traffickers on the dark web.

This work will continue.

Our message to criminals on the dark web is this: You can try to hide in the furthest reaches of the internet, but  the Justice Department will find you and hold you accountable for your crimes.

The Justice Department, together with our American and international partners, will continue to disrupt and dismantle darknet markets.

We will continue to illuminate the dark web.  And we will bring to justice those who try to hide their crimes there. I am now pleased to turn the podium over to FBI Deputy Director Abbate.

ANCHORAGE, ALASKA – On April 11, 2023, Judge Ralph Beistline of the U.S. District Court for the District of Alaska sentenced a Mexican national to 14 years imprisonment followed by five years of supervised release for his role as the head of a drug trafficking organization that spanned multiple states. Judge Beistline also sentenced a lower-level coconspirator based in Alaska to a term of seven years of imprisonment on April 12, 2023.

According to court documents, Rene Alejandro Pompa-Villa pleaded guilty to continuing criminal enterprise and money laundering conspiracy for his role in a drug trafficking and distribution enterprise that stretched from Alaska to Arizona, California, Massachusetts, Michigan, Nevada, New Mexico, New York, Ohio and Pennsylvania. From 2016 through October 2020, Pompa-Villa, the leader of the organization, regularly mailed large amounts of drugs to distributors throughout the country, including mailing parcels to drug dealers in Anchorage, and deposited hundreds of thousands of dollars of drug proceeds into various bank accounts. During the nearly three-year investigation, law enforcement officers seized about six kilograms of heroin, four kilograms of methamphetamine and four kilograms of fentanyl sent through the mail. The Alaska drug distributor, Kyle Redpath, pleaded guilty to conspiracy to distribute controlled substances for receiving drugs through the mail from the drug trafficking organization. Redpath also deposited thousands of dollars into bank accounts owned by the organization.

The continuing criminal enterprise statute that Pompa-Villa was convicted of violating applies to high-level leaders of large and organized criminal organizations.

Pompa-Villa and Redpath were indicted in April 2021 along with 8 other members of the enterprise located in Anchorage, San Diego, and Tucson. Dustin Noonan was sentenced to 21 years imprisonment on March 23, 2023. Tyler Landroche was sentenced to 70 months imprisonment on February 23, 2023.  Kimberly Renee Mackey was sentenced to 48 months imprisonment on February 22, 2023. Jessica Twigg was sentenced to time served on May 16, 2022. Carlos Camacho, Christopher Pompa-Villa, and Heydimar Marrero are awaiting sentencing. Victor Pompa-Villa remains at large.

“Today’s sentence disrupts a continuing criminal enterprise that spanned coast-to-coast and border-to-border,” said U.S. Attorney S. Lane Tucker. “The United States Attorney’s Office, in concert with our law enforcement partners, will continue to aggressively prosecute and seek justice against traffickers of fentanyl and other illegal drugs that are poisoning our communities.”

“The sentence imposed today underscores the commitment of the DEA to tirelessly pursue, and go wherever an investigation leads, to ensure those who traffic poison into our communities are held accountable,” said Jacob D. Galvan, Acting Special Agent in Charge, DEA Seattle Field Division.

“The US Postal Inspection Service will continue to aggressively investigate individuals like Pompa-Villa who use the US Mail in support of their criminal activities.” said Inspector in Charge Anthony Galetti, “This should also serve as a reminder to those who abuse our community by peddling dangerous narcotics; law enforcement will find you and bring you to justice. Cases like these don’t come together without teamwork and we thank all agencies involved.”

“A rockstar once said ‘I’ve never had a problem with drugs. I’ve had problems with the police.’ Though not a rock star, Mr. Pompa-Villa, because of his drug trafficking, also has problems with the police,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Illegal drugs are a tremendous plague on our communities. Because of that, IRS:CI will continue to work with our partners in the community and in law enforcement to stop the flow of drugs and cause as many problems for drug traffickers as possible, rockstar or not.”

U.S. Attorney S. Lane Tucker of the District of Alaska made the announcement.

The U.S. Postal Inspection Service (USPIS); U.S. Department of Drug Enforcement Administration (DEA); the Internal Revenue Service (IRS); Alaska State Troopers and the Anchorage Police Department are investigating the case. The U.S. Marshals had a significant role in making the arrests and the U.S. Attorney’s Offices in Tucson and San Diego played a critical role in the indictment of this case.

Assistant U.S. Attorneys Christopher D. Schroeder and Karen Vandergaw prosecuted the case.

This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl create huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies. For example, the counterfeit pills involved in this case, known as M30s, mimic Oxycodone, but when sold on the street they routinely contain fentanyl. These tablets are round and often light blue in color, though they may be made in many colors, and have “M” and “30” imprinted on opposite sides of the pill.

USA-IT and allies discuss ORC, how it threatens our communities, and what we can do to fight back.

Alysa Erichs, USA-IT spokesperson:

“Retail crime and shoplifting are not ‘victimless crimes’,” says Alysa Erichs with United to Safeguard America from Illegal Trade (USA-IT), an organization that fights illicit commerce. “Criminals do not care who or what lies in their wake as long as they’re making money, and it affects all of us (because) organized crime groups use their profits to bolster operations, bringing more crime to our neighborhoods.”

Cara Convery, Georgia’s Gang Prosecution Unit:

“Young people are at the foundation of the organized retail piece because, if they can avoid it, older people in the gang are not going to go into the store themselves, and they’re not going to the gas station to break in the car,” Convery said. “They also, unfortunately, learn that the juvenile exposure in our criminal justice system is significantly less, so if they get somebody arrested — especially for something like shoplifting where somebody’s not looking in the bigger scheme — they’re going to be out the next morning, they may not even go to juvenile court, and that’s another worker back on the street for them to make more money the next day.”

Former FBI special agent Jonathan Gilliam:

“If you tell a 5-year-old not to put his hand in the cookie jar and then he does it and he doesn’t get in trouble or he just gets a little bit in trouble, he’s probably going do that again,” says Gilliam. “It’s a learned behavior, where you learn when you get away with it and then when you get away with it you exploit that and so if you don’t have a penalty that is adequate to lock them up or and or deter them, they’re just going to keep doing it.”

Read more here.

Amy Drumm, senior vice president of government affairs with the Michigan Retailers Association, spoke with Loss Prevention Magazine on the work that went on behind the scenes to get ORC legislation enacted in Michigan.

“MRA took the lead in coordinating the legislative efforts of having the three legislative pieces drafted, introduced, and moved through the legislative process. Our role is to speak for the retail industry at large. After talking with our members, we provided testimony before the House and Senate committees in support of the INFORM Act and real penalties for ORC crimes.”

“We built a coalition with likeminded associations to highlight the impact ORC has on not just retailers but also manufacturers in perpetuating other crimes. We worked in partnership with some of our more engaged members to educate lawmakers on the INFORM Act and the need for a statewide ORC unit within the Attorney General’s office. MRA was able to connect the dots on the three efforts and convey the message that all three pieces were needed to crack down on ORC in the state.”

“Taking a single legislative solution approach to ORC likely won’t achieve the needed results. We were successful because we pitched the three pieces together and built a strong coalition in support of the legislative changes. Gaining USA-IT’s support on our legislative changes was also extremely helpful to leverage the additional coalition and network of support focused on stopping illicit trade. [EDITOR’S NOTE: United to Safeguard America from Illegal Trade (USA-IT) is a public private sector partnership protecting Americans’ security and prosperity from black market criminals.]”

Read more here.

Mike Bailey, general counsel and director of legal reform programs for the Arizona Chamber of Commerce & Industry, discusses the dangers of illegal trade and how Arizona businesses are working together to fight back.

“Arizona business leaders have been rallying against the dangers of illegal trade, creating partnerships with national institutions and between the private and public sector to respond to this crisis. Illegal trade presents a continuing threat to Arizona’s economic prosperity and public safety, and leaders with diverse backgrounds have come together to find common solutions.”

“It’s not just money. Illegal trade puts lives at risk. Massive fentanyl seizures are commonplace. In recent weeks, a cache of fentanyl precursor chemicals was seized from a Tucson warehouse. Because of the scale and complexity of illegal trade, business leaders must create partnerships that mobilize community resources.”

“The Arizona Chamber of Commerce & Industry has been proud to support United to Safeguard America from Illegal Trade (USA-IT), a private-public partnership that protects Americans from black market criminals. Last December, the Chamber was recognized with the 2022 Award for Most Committed USA-IT Partner for its dedicated work on the frontlines of the illegal trade issue. These partnerships build upon the work of business leaders, law enforcement, and policy experts to understand the many facets of illegal trade and to develop strategies to combat them.”

Read more here.

USA-IT partners discuss the convergence of illegal trade and human trafficking.

Awaken:

“As a co-founder of the non-profit Awaken — an organization dedicated to assisting women and children victimized by sexual exploitation in Reno, Nev., Melissa Holland said legal prostitution enables the problem of the illicit trade. ‘We’re a sex tourism state,’ Holland told the USA-IT roundtable. ‘Traffickers actually love that there’s legalized prostitution in Nevada, and they find out that the laws have already done half the work of grooming for them.’”

Arizona Lodging and Tourism Association:

“There was an uptick in sex trafficking activity during the last time Phoenix hosted the Superbowl in 2015, said Kim Grace Sabow, president and CEO of the Arizona Lodging and Tourism Association. ‘These bad actors are attracted to great destinations, mega-events, and these bad actors are just following the money,’ Sabow said.”

Read more here.

USA-IT partner and president and CEO of the Pennsylvania Food Merchants Association Alex Baloga featured on why retailers are being forced to hire private security.

“According to United to Safeguard America from Illegal Trade (USA-IT), in 2021 alone retail thefts in Pennsylvania totaled nearly $5.6 billion and cost more than $510 million in state and local taxes. In a recent DVJournal podcast, Alex Baloga with the Pennsylvania Food Merchants Association talked about how “sophisticated” retail crimes like shoplifting and smash-and-grab robberies have become.”

“And, Baloga said, criminals take advantage when communities decline to enforce laws against these property crimes, moving from place to place. ‘We have seen where laws have been relaxed, there have been more brazen acts. These are organized, sophisticated criminals, not an average person who’s just down on his luck.’”

Read more here.

USA-IT spokesperson Alysa Erichs comments on the dangers of Organized Retail Crime.

“‘The tragic death of an 83-year-old store employee in North Carolina is yet another reminder that retail crime and shoplifting are not ‘victimless crimes,’ said Alysa Erichs, former acting executive associate director for Homeland Security Investigations. ‘Sadly, this is another example that criminals do not care who or what lies in their wake as long as they’re making money. It’s sick, and it affects all of us. These crimes have very real, dangerous consequences — it’s why we must work together to protect our communities.’”

“Erichs is a spokesperson for United to Safeguard America from Illegal Trade (USA-IT), a private-public partnership to fight the sale of counterfeit, illicit and stolen goods. In the past, its focus was more on cross- border contraband and fake products like fraudulent vaccines and personal protection equipment. But at a recent summit in Washington, it dedicated an entire roundtable to the growing problem of organized retail crime.”

Read more here.

USA-IT partners discuss how Organized Retail Crime and counterfeit goods impact consumers and put them at risk.

Rob Karr, president and CEO of the Illinois Retail Merchants Association:

“I think people have fallen into the habit of thinking of shoplifting as a victimless crime and it is not. It’s a high-profit center for these crimes … Somebody says, ‘Well, we should not worry that much about shoplifting.’ No, we should. Because it’s your friend and neighbor who is working at the store or managing the store, but it’s also your roads that are not getting repaired, your schools that are not getting funded properly, and when police cannot afford an extra officer on the day shift or the night shift, it impacts them.”

Jennifer Hanks, director of brand protection for the American Apparel and Footwear Association:

“Counterfeiters do not necessarily care to make the safest products possible. It’s about the money and the money laundering, the things they’re doing with those funds.”

Read more here.

USA-IT Calls on Congress to Tackle Illegal Trade

Coalition of public and private sector security experts join with Members of Congress to call for help in combating rising tide of black-market trade

WASHINGTON, DC — Today, United to Safeguard America from Illegal Trade (USA-IT)—a coalition of more than 85 national and state brand enforcement experts, law enforcement agencies, academics, and leading business organizations—hosted its second annual National Summit in Washington, D.C. At the summit, leading advocates called on Congress to embrace new policies urgently needed to combat the growing threats posed by illegal trade, including counterfeiting, smuggling, organized retail theft, and drug and human trafficking.

Representative Bennie Thompson (D, MS-02) opened the summit delivering keynote remarks. “Illicit trade not only damages our businesses and economy but can also pose health and safety risks for consumers and even undermines our security. When the government and private sector work together, hand in hand, we’re more efficient and effective at combating this threat. This is about protecting all of America.”

Senator Bill Cassidy, M.D. (R, LA)stated in his keynote remarks, “When advocates and experts bring their expertise to their congresswoman, congressman, or senator, we can make real change happen. Since speaking to this conference last year, we have made progress on countering trade-based money laundering because of experts like you pushing solutions forward.”

Additionally, coalition members held five panel discussions featuring subject matter experts from large and small companies, law enforcement, academia, and policy experts to examine the impacts of illegal trade and counterfeits. These discussion topics included:

• Overcoming challenges for protecting American innovation and competitiveness.
• Confronting the growth of organized retail crime.
• The connections between human trafficking and other forms of illegal trade.
• What more can be done to ensure gender diversity in positions of national security decision-making.

Launched in June 2021, USA-IT is working across 15 states facing critical illegal trade issues to empower local officials, law enforcement, and other leaders with new information and training programs and raising public awareness of the depth and severity of these crimes. To date, USA-IT has trained more than 33,000 law enforcement officials, hosted and attended more than 60 events, and delivered 190 briefings.

“Criminals will seize upon the opportunity to exploit any vulnerabilities in our trade and financial systems for their personal gain, with no regard for public safety. Law enforcement is doing everything they can to combat the threat that illegal trade poses to our national security, economy and public safety,” said USA-IT spokesperson and former acting executive associate director for Homeland Security Investigations, Alysa Erichs. “However, no agency can do it alone. Cooperation between the public and private sector is absolutely essential in order to successfully tackle the many aspects of illegal trade. That is why I’m so excited to be part of USA-IT. Together we can share information, expand expertise, identify trends and vulnerabilities as well as innovative solutions to prevent these criminals from getting rich and damaging the American economy.”

“Fighting these organizations for more than a decade, I’ve seen firsthand how the seemingly innocuous trafficking of illicit tobacco and nicotine products, like cigarettes and e-vapor products, has very serious consequences,” said Kristin Reif, director of government relations for Philip Morris International. “But criminals don’t just traffic in one commodity, they will traffic in anything that earns them a dollar, whether that’s luxury purses or drugs or even human beings. That’s why USA-IT is so crucial—by bringing together such a diverse group of stakeholders, we can bring this pervasive problem into lawmakers’ focus and can more effectively counter the threat of illegal trade.”

The black market is a $2.2 trillion-per-year business, and is growing. In the U.S., counterfeit goods alone rob the economy of $131 billion and 325,500 jobs, but its impacts reach much further into our society’s roots and put America’s security and prosperity in jeopardy. Revenues meant to provide essential services to Americans are robbed from taxpayers to fuel some of the world’s most dangerous criminal enterprises. Illegal trade produces counterfeit and potentially harmful consumer goods, floods our streets with deadly drugs, and encourages violence—all of which create instability in our communities, generating even more of these nefarious activities. It’s a vicious circle.

Public actors, the private sector, and civil society alike all have a role to play. Only through cooperative efforts like USA-IT can we effectively ensure a safer, more secure, and more prosperous future.

For more information about USA-IT’s efforts to combat illegal trade and to get involved, visit USAIT.org or email us at [email protected].

For media requests, please email [email protected]

About USA-IT

United to Safeguard America from Illegal Trade (USA-IT) is a public- and private-sector partnership designed to help protect American security and prosperity from black-market criminals.

Contacts

Sam Dashiell

U.S. Communications, Philip Morris International
T. +1 (202) 480 1617
E.  [email protected]

Earlier today, at the federal courthouse in Central Islip, Patrick Polidore was arraigned by United States Magistrate Judge Steven I. Locke on charges that he and co-defendant Dennis Wolfolk conspired to purchase and illegally transport into New York more than two dozen handguns.  Wolfolk is in federal custody at the Robert A. Deyton Detention Facility located in Lovejoy, Georgia, and will be removed to the Eastern District of New York for arraignment on the charges at a later date.

Breon Peace, United States Attorney for the Eastern District of New York, John B. Devito, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), and Anne T. Donnelly, Nassau District Attorney announced the charges.

“As alleged, these defendants illegally trafficked over two dozen guns across state lines, distributing them to street-level buyers in New York where at least 11 were then used in numerous violent crimes, including multiple shootings across Long Island,” stated United States Attorney Peace.  “This office and our law enforcement partners will continue to vigorously investigate and prosecute those who exploit state and federal gun laws directly leading to deadly gun violence in our communities.”

Mr. Peace thanked the United States Attorney’s Office for the Northern District of Georgia, the ATF’s Atlanta Field Division, the Nassau County District Attorney’s Office, the Nassau County Police Department, and the Hempstead Police Department for their assistance in the investigation.

“Straw purchasers undermine federal laws and enable violent criminals to obtain firearms that destroy lives and devastate communities,” said ATF Special Agent in Charge DeVito. “This investigation was initiated by the ATF Long Island Firearms Task Force after a 2020 murder in Hempstead, NY. Evidence recovered by ATF led to Polidore. As alleged, further investigation revealed he conspired to illegally traffic approximately 27 firearms from Georgia to Long Island. ATF is on the frontline in the fight against firearms trafficking alongside our partners. We will use every resource to save lives and stop the flow of illegal guns into our communities. Thank you to our law enforcement partners, including: Nassau County Police Department’s Gang Investigation Squad, Nassau County District Attorney and Hempstead Police Department for all their work and effort.”

“The arraignment of defendant Patrick Polidore and continued investigation into defendant Dennis Wolfolk is a clear example how law enforcement working together continues to arrest and prosecute these criminals to ensure the safety of our neighborhoods.  The defendants illegally transported dozens of handguns to Long Island and surrounding areas.  Some of these weapons were used in the commission of multiple shootings and other violent crimes.  We will continue to investigate all who break the law in order to reduce gun violence in all communities.  Lastly, I would like to thank all of the investigators who assisted with this investigation for their commitment and dedication to suppressing crime,” stated NCPD Commissioner Ryder.

Nassau District Attorney Donnelly said: “Illegal firearms are flooding into Long Island every day and causing untold destruction. To date, our county law enforcement partners have seized 272 weapons in 2022. As of this date last year, that number was 193. Patrick Polidore and Dennis Wolfolk are part of that problem. These defendants allegedly conspired to purchase firearms in Georgia and trafficked those weapons to Long Island, where at least 11 of them have already been recovered at crime scenes. Stemming the flow of illegal weapons into Long Island requires great partners and I thank U.S. Attorney Breon Peace; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); and the Nassau County Police Department for their work in bringing these alleged gun runners to justice.”

As alleged in an 11-count Indictment and detailed at Polidore’s arraignment, between October 2020 and January 2021, Polidore visited numerous federally licensed retailers and acted as the straw purchaser for approximately 27 handguns, many of which were purchased in rapid succession on the same date.  For example, as alleged, on November 4, 2020, Polidore purchased six handguns at multiple locations in Georgia; on November 18, 2020, and November 23, 2020, he purchased a total of ten handguns.  On federal records that document firearms transactions, Polidore falsely affirmed that he was the actual purchaser of the weapons when, in actuality, he had conspired with Wolfolk, who, as a convicted felon, was legally prohibited from possessing a firearm, to traffic the handguns to New York, where they were distributed to street-level buyers.

At least 11 of the handguns Wolfolk transported to New York have been recovered by law enforcement at crime scenes in and around Long Island.  For example, shortly after Polidore’s November 4, 2020 purchase of six handguns from different retailers in Georgia, Wolfolk traveled to Long Island with the weapons. Within months, three of the firearms purchased by Polidore were recovered by police on Long Island:

• On January 13, 2021, during a traffic stop in Hempstead, New York—where Wolfolk had previously resided—three individuals, including a juvenile, were found in possession of a 9mm Ruger handgun purchased by Polidore. This gun was linked to an earlier shooting in Uniondale on November 25, 2020, in which unknown individuals fired shots at a vehicle.  The shell casings from that shooting incident matched the firearm purchased by Polidore just two days earlier.
• On May 28, 2021, during a traffic stop in Patchogue, New York, police arrested an individual in possession of a .22-caliber Walther handgun purchased by Polidore.
• On October 3, 2021, police arrested an individual fleeing the scene of an armed robbery in Bethpage, New York, who was in possession of a .40-caliber Smith & Wessen handgun purchased by Polidore. This same firearm was subsequently linked to a shooting incident in Hempstead on December 16, 2020

Additionally, on December 22, 2020, police investigating the scene of a homicide in Hempstead, New York, located a gun box that had been purchased along with a .40-caliber Glock handgun by Polidore.

To date, the whereabouts of at least 16 firearms purchased by Polidore are still unknown.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Anthony Bagnuola and Mark E. Misorek are in charge of the prosecution.

The Defendants:

PATRICK POLIDORE
Age: 32
Powder Springs, Georgia

DENNIS WOLFOLK
Age: 29
Lovejoy, Georgia

E.D.N.Y. Docket No. 22-CR-347 (JMA)

Matt Albence, USA-IT spokesman and former acting director of U.S. Immigration and Customs Enforcement (ICE), is quoted applauding Florida legislation cracking down on organized retail crime:

“We applaud Attorney General Moody, Sen. Boyd and Rep. Clemmons for moving this important public safety legislation forward. States across the country are taking positive steps, equipping police and prosecutors with these new tools. Through cooperative, cross-sector efforts, we can all work together to stop Organized Retail Crime that is hurting our economy, endangering our citizens and providing a revenue stream for criminal organizations.”

Read more here.

John D. Negroponte, who served as the first director of national intelligence (2005-2007) and as deputy secretary of state (2007-2009) explains why public-private partnerships are needed to effectively fight illegal trade and black-market criminals.

“Thankfully, we have more resources at our disposal than ever before. Our military, intelligence community and law enforcement agencies will always remain key to our fight against adversaries who would do us harm. But the source of America’s innovation – the private sector – has a crucial role to play in our national security. In fact, public-private partnerships, which marry the specific expertise and know-how of the private sector with the law enforcement capabilities and resources of government, might be one of the best tools we have to undermine our adversaries’ bottom line.”

“While public-private partnerships will not end terrorism or transnational crime by themselves, they have proven their efficacy, present win-win solutions, and most of all, are sustainable in the long run. If the past two decades are any lesson, humility in our assessments of what we can and cannot achieve internationally is critical. We also learned that remediating root causes, rather than applying bandages, will save us precious resources and blood. Most of all, we know that we cannot do anything alone – our partners and allies are our most important assets. Respect for these lessons, coupled with American ingenuity right here on our soil, will provide the necessary tools to defeat our adversaries.”

Read more here.

Rob Karr, president and CEO of the Illinois Retail Merchants Association and USA-IT partner, provides insight on the growing problem of robberies and the resale of stolen items.

Watch it here.

Rob Karr, president and CEO of the Illinois Retail Merchants Association and USA-IT partner, provides insight on the growing problem of robberies and the resale of stolen items.

Watch it here.

WASHINGTON, Dec 9 (Reuters) – The chief executives of major U.S. retailers including Target (TGT.N), Home Depot (HD.N), Kroger (KR.N), CVS Health (CVS.N), Autozone (AZO.N) and Best Buy (BBY.N) on Thursday urged Congress to take action to address the online sale of stolen, counterfeit and dangerous consumer products.

The group called on Congress to crack down on anonymous online sales, citing the growing impact of organized retail crime.

“Retail establishments of all kinds have seen a significant uptick in organized crime in communities across the nation,” the letter said.

“Criminals are capitalizing on the anonymity of the Internet and the failure of certain marketplaces to verify their sellers. This trend has made retail businesses a target for increasing theft.”

On Friday, the White House said it has been in contact with federal law enforcement officials over a string of flash mob “smash and grab” robberies of U.S. retail stores.

A wave of “smash-and-grab” crimes is plaguing upscale stores in major U.S. cities, with mobs of thieves making off with expensive goods in brazen raids. The cities of San Francisco and Los Angeles have seen a several high-profile robberies.

The letter, which was also signed by the CEOs of Neiman Marcus, Levi Strauss, Rite Aid (RAD.N), Walgreens Boots Alliance (WBA.O), calls on Congress to pass legislation to make it “easier for consumers to identify exactly who they are buying from, and make it harder for criminal elements to hide behind fake screennames and false business information.”

The bill introduced in 2020 would require verification of third-party sellers on online retail marketplaces. It would also order online platforms allowing for third-party sellers of consumer products “to authenticate the identity of high-volume third-party sellers” to “prevent organized retail crime”.

Online marketplaces would need to verify high-volume third-party sellers by obtaining seller’s government ID, tax ID, bank account information, and contact information.

Our Standards: The Thomson Reuters Trust Principles.

(CNN)US customs officers have seized a container filled with more than $30 million worth of fake designer bags and clothing at a Los Angeles port ahead of the holiday season, US Customs and Border Protection officials said.

CBP officers found bags, shirts and pants bearing counterfeit logos including Gucci and Louis Vuitton at the Los Angeles Seaport on November 9, the CPB said in a statement released December 2.
The container of 13,586 items had been shipped from China and would have had a combined estimated recommended retail price of $30,437,775, it said.

The CBP said that counterfeit goods had historically been sold in underground outlets and on illegitimate websites.
“The rise of e-commerce offers a haven for criminals who are now able to hide behind seemingly legitimate listings on well-known websites. The sale of counterfeit commodities multiplies the illegal profits of smugglers and traffickers who reinvest the proceeds from such sales into further criminal enterprises,” it said in its statement.

The agency’s Director of Field Operations in Los Angeles, Carlos C. Martel, said that “substantial law enforcement resources” were deployed to keep fake goods out of US supply chains.
Donald R. Kusser, port director of the Los Angeles/Long Beach Seaport, said that counterfeit goods were often poor quality and could be unsafe for consumers.

“Bad actors exploit e-commerce operations by selling counterfeit and unsafe goods through online platforms, particularly during the holiday season when shoppers are looking for deals,” Kusser said in the statement. “If the price of the product seems too good to be true, it probably is.”
In a release in late November, the CBP said that counterfeit products cost the global economy more than $500 billion annually.
“Counterfeit goods are a problem all year long, but the increased demand for gifts, household products, virtual learning tools, and even health products means that the holiday season is an especially busy time for crooks who are looking to make a profit by selling knock off goods to unsuspecting consumers,” it warned.
“This year, due to the global pandemic, supply chain crisis, and shifting shopping habits, millions of consumers are purchasing their holiday gifts and other necessities online.”

In its December release, CPB said that its personnel seized 26,503 shipments containing counterfeit goods worth an estimated $1.3 billion — had they been genuine products — in the 2020 financial year.

The CBP recommended that shoppers purchase directly from trademark holders or authorized retailers and read reviews and check for working phone numbers if shopping online.

David M. Luna FOUNDER AND EXECUTIVE DIRECTOR, ICAIE; PRESIDENT AND CEO, LUNA GLOBAL NETWORKS & CONVERGENCE STRATEGIES LLC.

Illegal trade is not a victimless or petty crime. Criminalized markets and illicit economies are connected by cross-border, shadowy webs of kleptocrats, organized criminals, and networks that threaten our collective security. Some of the world’s most insidious criminal and terrorist groups, including the Cartel Jalisco Nueva Generación (CJNG), Sinaloa Cartel, Mara Salvatrucha (MS-13), Venezuela’s corrupt ruling elite, the Taliban, Al-Qaeda, Hezbollah, and other threat networks profit from criminal activities.

Across today’s security landscapes, criminals exploit natural disasters like Hurricane Michael, human misery like that experienced through the ongoing opioid epidemic, and market shocks like those stemming from COVID, for illegal enrichment, and kleptocratic assets driving real estate prices beyond the affordability for most Floridians. But it doesn’t stop there. Criminals will traffic anything and everything that will earn a profit while endangering our citizens, including everyday goods like baby formula, cosmetic products, and even orange juice.

Illegal trade is the financial lifeblood of today’s greedy bad actors. It enables them to loot revenues, spur violence, kill our youth with deadly fentanyl, corrupt our institutions, and facilitate other crimes—making all our families and communities less safe. It also finances terrorist attacks against our national interests as we have seen through the lucrative cultivation and trafficking in heroin by the Taliban in Afghanistan, or sexual exploitation and trafficking by ISIS in Iraq and Syria.

The 2.2 trillion dollar-a-year industry of transnational crime facilitated by corruption and illegal trade includes the smuggling of and trafficking in persons, narcotics, opioids, weapons, counterfeit and pirated goods; illegal tobacco and alcohol products; illegally harvested timber, wildlife, and fish; pillaged oil, diamonds, gold, natural resources and precious minerals. They are sold on our main streets, on social media, in online marketplaces, and on the dark web every minute of every day. The United Nations has estimated that the dirty money laundered annually from such criminal activities constitutes up to five percent of global gross domestic product, or $4 trillion.

And these criminals are cunning and ruthless and will engage in murder to hold and expand their illicit markets. Operating with such impunity enables these groups to fund their operations and establish and sustain trade routes for trafficking more dangerous contraband into Florida and across the country. They are nimble enough to avoid law enforcement and enterprising enough to continually establish new revenue streams, recruit vulnerable citizens, buy sophisticated anonymized technologies, and be dynamic in their execution of their criminal enterprises.

The very things that make Florida such a wonderful place to live—a vibrant, populous state with 15 deepwater ports, advanced transportation infrastructure, and of course world-famous beaches and shoreline (the second-longest in the United States)—also make it attractive to smugglers and traffickers. Florida has always been particularly vulnerable to illegal trade and money laundering, and, in the past few years, even more criminal organizations have expanded their illicit operations into the Sunshine State including through dirty money by Chinese, Russian, and Iran-backed criminal syndicates.

The statistics are staggering. In 2019, Florida was the U.S. state or territory with the largest volume of cocaine seizures by weight. From 2015 to 2016, federal law enforcement in Florida seized over $88 million in smuggled currency, second most in the nation. Even more, and more horrifying, Florida ranks third in the U.S. in human trafficking cases, totaling 4,636 cases since 2007—and those only account for the cases that were reported. While these and other crimes are often viewed as isolated, all forms of illegal trade are connected and have severe consequences to Florida’s security and prosperity. Recently, a Syrian national living in South Florida was indicted for laundering money and bribing Venezuelan officials in exchange for receiving $250 million in lucrative contracts from Venezuelan government officials.

Illegal trade steals revenue from Florida businesses and state and local government, robbing communities of investments necessary to stimulate economic growth and sustainable development, especially during these volatile economic times. Revenue that could be used to build roads, hospitals, and schools to educate children, instead lines the pockets of criminals and kleptocrats. For example, counterfeit products robbed the U.S. economy of $131 billion and 325,000 jobs in 2019. Additionally, $173 million of Florida’s tax revenue is lost every year due to illegal tobacco. That’s $173 million that could have gone to supporting our law enforcement, but instead winds up funding the very same criminals they’re fighting.

It is important for all market stakeholders to share more data to better understand today’s illicit threats that are harming our country. We must also ensure that our law enforcement agencies have the necessary legal authorities and resources to counter cross-border illegal trade, upend anonymized criminal communications, prosecute corruption and money laundering cases, and protect our communities across Florida and other states. We must also elevate our fight in Congress as a national security and foreign policy priority. Concrete actions that can and should be taken include: Develop, implement, and evaluate prevention and risk management strategies that address the underlying causes, drivers, and risk factors that threaten international peace and economic prosperity; Strengthen the fight against corruption, illicit trade, and counterfeiting as national security priorities by developing national strategies to prevent and combat criminal profit, threat financing, and illicit financial flows; Promote effective measures to deprive transnational criminal organizations and terrorist groups of illicit gains by advocating for robust national frameworks for financial investigation, threat finance, and trade-based money laundering (TBML).

Strengthen legal authorities, measures, and sanctions to counter new, emerging forms of criminality related to illegal trade, counterfeits, human trafficking, wildlife trafficking, organized crime, corruption, and terrorism.

Increase public awareness of how convergence of these crimes affects public health and safety, economic recovery and development, and the security and stability of governments and markets; Strengthen cross-border cooperation at international, national, regional, state and local levels, to establish formal and informal partnerships with governments, innovators, security experts, civil society and non-governmental organizations (NGOs), academics, business leaders, and other stakeholders that foster trust, cooperation, actionable intelligence, and collective action to combat illicit economies across borders.

Unfortunately, the problem of illegal trade cannot be solved by any one government, agency, or company working alone. We need a whole-of-society approach in order to strengthen the political will in risky and unruly markets to combat illegal trade, confiscate criminally-derived proceeds, promote information-sharing and coordinated enforcement actions, and develop more innovative and smarter supply chain and risk management solutions.

This is why the International Coalition Against Illicit Economies (ICAIE) is committed to strengthening public-private partnerships and implementing a multi-faceted framework that targets illegal trade in source, transit, and demand markets. Doing so leverages actionable intelligence to help unravel the complex criminal networks’ infrastructure and operational modalities, identifying the key actors, and collecting evidence of their illicit enterprises to enhance greater disruption and decapitating of these threats.

Furthermore, public education initiatives such as those being advanced by United to Safeguard America from Illegal Trade (USA-IT)—a coalition of brand enforcement experts, law enforcement agencies, and leading business organizations, including ICAIE, working together in states facing critical illegal trade issues—are so important. Cooperative efforts like this raise public awareness and provide local officials, law enforcement, and other leaders with resources and training in order to protect America’s security and prosperity from black markets and the ill-gotten gains of criminals.

By working together, we can unite against the corruptive influence of today’s bad actors and threat networks that are sabotaging legitimate commerce and the legal economies in Florida, and across the United States and internationally and to ensure justice, safer communities and safeguard our children from deadly drugs, violence, and criminal recruitment. Let’s keep dirty money from kleptocrats and authoritarian states out of our economies, dismantle cartels and gangs destroying our cities and our children’s futures, and expose complicit enablers flooding our streets with harmful counterfeits and contraband.

Download the PDF here

Coalition of public and private security experts presents policy recommendations to Members of Congress to help combat rising tide of black-market trade

WASHINGTON, Dec. 1, 2021 /PRNewswire/ — Today, a coalition of private and public experts, joined together as United to Safeguard America from Illegal Trade (USA-IT), hosted a first-of-its-kind policy summit in Washington, D.C., to advocate that Congress embrace new policies that are urgently needed to combat the growing threats posed by illegal trade—including counterfeiting, smuggling, organized retail theft, and drug and human trafficking.

During the summit, Senators Kyrsten Sinema (D-Az.) and Bill Cassidy (R-La.) delivered keynote speeches. “Serving in the Senate, I see the loopholes in our laws and the gaps in our policies that make it easy for criminal and terrorist networks to trade in illicit goods. And as a medical doctor, I have seen firsthand how the opioid crisis has taken the lives of 100,000 Americans during the pandemic, destroying families across this country,” said Sen. Bill Cassidy. “We need to solve illicit trade to address all of the deadly symptoms it creates. This is not just an issue of national health—it is an issue of national security.”

Cassidy continued, “What makes USA-IT important and unique is that it brings together stakeholders from different industries, different sectors, different regions and different backgrounds with the unifying purpose of combating illegal trade.”

“Keeping America safe represents a constantly evolving challenge, and I’m eager to continue working with Senator Cassidy and colleagues on both sides of the aisle to plan for the future and further strengthen America’s security and competitiveness. We will achieve these goals through bipartisan cooperation and coalitions, and you can count on me as a partner in the effort to stop illicit trade,” said Sen. Kyrsten Sinema.

Additionally, coalition members held three panel discussions featuring subject matter experts from large and small companies, law enforcement, and policy experts to examine how illegal trade funds terrorism; new challenges confronting law enforcement; and the vital role public-private partnerships can play to reduce illegal trade.

USA-IT partners are presenting their policy recommendations to Members of Congress, which USA-IT believes can advance solutions that effectively curb the threat of illegal trade. These include:

• Establishing a national framework against illegal trade and organized crime;
• Addressing challenges posed by e-commerce;
• Confronting the abuse of small parcels in contraband trade;
• Disabling foreign Free-Trade Zones (FTZs) from promoting illegal trade; and
• Disincentivizing illicit activities through stronger sanctions and penalties for criminal and corrupt actors

Launched in June 2021, USA-IT is working across 12 states facing critical illegal trade issues to empower local officials, law enforcement, and other leaders with new information and training programs and raising public awareness of the depth and severity of this crime. To date, USA-IT has brought together more than 60 national and state brand enforcement experts, law enforcement agencies, and leading business organizations dedicated to fighting illegal trade.

“Law enforcement recognizes that any weaknesses in our system are going to be seen as opportunities by criminals and terrorists. And we are certainly seeing some vulnerabilities in our systems right now due to the ongoing supply shortage,” said USA-IT spokesman and former director of U.S. Immigration and Customs Enforcement (ICE), Matt Albence. “Illegal trade makes criminals rich and damages our economy, businesses, and our communities. Tackling it requires cooperation and public-private partnerships, making full use of existing expertise, information sharing, innovative solutions, and evolving technologies—and that is exactly what we’re doing with USA-IT.”

“Philip Morris International is proud to join together with such a diverse group of stakeholders from various industries and the public sector to expose the hidden costs and consequences of illegal trade,” said Hernan Albamonte, head of Illicit Trade Prevention U.S. for Philip Morris International. “By working together and bringing this pervasive problem into lawmakers’ focus, we can more effectively combat this tremendous threat to Americans’ security and prosperity.”

In 2019, counterfeit goods robbed the U.S. economy of $131 billion and 325,500 jobs—but it’s ills seep deeper into the fabric of American society there. Criminals get rich from illegal trade by robbing revenues meant to provide essential services to Americans. Instead of helping taxpayers, money is diverted to fuel some of the world’s most dangerous criminal enterprises. These groups exploit governments and citizens, manipulate financial systems, spur corruption, and cultivate instability and violence that threaten our communities.

Public actors, the private sector, and civil society alike all have a role to play. Only through cooperative efforts like USA-IT can we effectively ensure a safer, more secure, and more prosperous future.

For more information about USA-IT’s efforts to combat illegal trade and to get involved, visit USAIT.org or email us at [email protected].

For media requests, please email [email protected]

About USA-IT
United to Safeguard America from Illegal Trade (USA-IT) is a public- and private-sector partnership designed to help protect American security and prosperity from black-market criminals.

Contacts:
Sam Dashiell
U.S. Communications, Philip Morris International
T. +1 (202) 480 1617
E. [email protected]

SOURCE United to Safeguard America from Illegal Trade (USA-IT)

Related Links
https://USAIT.org

Counterfeit goods fund traffickers and terrorists.
Jessica Levy | for United to Safeguard America from Illegal Trade (USA-IT)

To unsuspecting consumers, buying counterfeit or stolen goods may seem like an easy way to get a great deal, but often don’t realize they’re not buying a legitimate, legal product. This combination is at the heart of illegal, black market trade, which has far-reaching and dangerous consequences.

In communities across America, illegal trade is fueling human trafficking, narcotics smuggling and terrorism, according to security experts at the United Nations and the International Criminal Police Organization (INTERPOL).

From tobacco and pharmaceutical products to fashion items and tech products, billions of dollars worth of illicit goods are sold each year, and the profits line the pockets of criminals.

To combat the rising tide of illegal trade, United to Safeguard America from Illegal Trade (USA-IT) is bringing together a diverse group of stakeholders from various industries and the public sector. The goal is to empower local officials and law enforcement to better enforce illegal trade, and to expose the hidden costs and consequences of this crime. USA-IT is also advocating for policy change to prevent illegal trade and its negative outcomes.

Hidden costs and consequences of illegal trade
Illegal trade is not a “victimless crime.” In fact, there is a lengthy list of possible and probable victims. According to Barb Bergin, executive project director of Crime Stoppers USA and executive director of Central Florida Crimeline, victims may include children and others who are forced into labor by human traffickers.

“Things grown cheaply or made cheaply — they are made by people being exploited. No one is giving anything away for free. If descriptions are vague or not clear or thorough, you can tell you’re not dealing with a legitimate organization — and someone is hurt by that,” Bergin said.

Businesses suffer, too — especially small or medium-sized businesses that typically specialize in only a few products and operate on thin profit margins, noted Dr. Jeff Rojek, Director of the Center for Anti-Counterfeiting and Product Protection at Michigan State University.

“When you allow counterfeiting to occur, you’re undermining the existence of these businesses that employ millions of individuals in this country and are key to our economy,” Rojek said.

In addition to the individuals and businesses that are hurt throughout the production and sale of illicit goods, American cities and towns also miss out on the lost tax revenue that they would have received if the goods were purchased legitimately. That leaves less funding available for schools, transportation and other critical local services.

“Nearly a quarter of cigarettes consumed in the United States are purchased illegally —resulting in up to $7 billion in tax losses to individual states and municipalities. And that’s just cigarettes,” said Hernan Albamonte, head of U.S. Illicit Trade Prevention for Philip Morris International.

Instead, black market criminals use the funds from illegal sales to maintain and grow their criminal networks throughout the country and abroad.

“American businesses are losing so much money to these criminals, and they’re using that money to pump our streets full of drugs, which bring additional crime; guns, which bring more violence; and instability to our communities which increases the illegal activity these criminals are profiting from. It’s a vicious circle,” Albamonte said.

Counterfeit pharmaceuticals can put consumers in danger
In some cases, illegal trade in counterfeit pharmaceuticals — a highly profitable area for criminals — can have dangerous results. While a counterfeit bag or scarf may not cause direct harm to a consumer, counterfeit pharmaceuticals can be harmful or even deadly.

“Counterfeit drugs often don’t contain any medicine and so patients are not getting the medicine they need to treat their illnesses. The pills could be contaminated, could contain bacteria, it’s very serious,” said Tara Steketee, director of Global Product Integrity at Merck.

In this case, the old adage is true: If an advertisement seems too good to be true, it probably is. Stay away from links on Snapchat or Instagram, or from online pharmacies that don’t make it clear from where they’re operating.

“Really know who you’re buying from and take the time to choose a national chain or a licensed mom-and-pop — it might not be the cheapest and easiest thing to do, but it is the safest thing to do and the best way to ensure you get the medicine you need and are not poisoned,” Steketee said.

Advocating for a multi-faceted solution

A combination of factors has led to a recent proliferation in the sale of illicit goods, including e-commerce platforms that allow anonymous third-party sellers to peddle their wares without oversight. Additionally, as ongoing supply chain issues cause shortages throughout the country, some criminals are taking advantage of what they view as an opportunity to hawk counterfeit or illegal products to meet demand.

In order to prevent the situation from deteriorating even further, industry experts are advocating for a multi-faceted approach to tackling the problem.

“No one government or industry can address this complex problem on its own,” Albamonte said. “It requires cooperation and public-private partnerships — making full use of existing expertise, information sharing, innovative solutions and evolving technologies. Public actors, the private sector and civil society alike all have a role to play.”

Suggestions from USA-IT partners include:

• Increasing information-sharing between industry, law enforcement and government
• Funding people and agencies that try to stop illicit products from getting into the United States, including DHS, law enforcement, port authorities and people investigating containers
• Increasing transparency in online sales, providing American consumers with the necessary information about sellers offering products, making them aware of the risks of purchasing counterfeit products, notifying them if they potentially bought counterfeit products, and removing as soon as possible counterfeit products once they have been identified
• Increasing prosecution of illegal traders to remove the perception that illegal trade is a “low risk” activity
  USA-IT will present detailed policy recommendations to members of Congress at the USA-IT D.C. Summit on December 1-2, 2021.

Learn more about United to Safeguard America from Illegal Trade (USA-IT) and its efforts to combat illegal trade.

Members of the editorial and news staff of USA TODAY Network were not involved in the creation of this content.

USA-IT partners discuss how shoppers can protect themselves when buying gifts online:

“Think about the following: When little Johnny asks for the newest Xbox for Christmas, and the stores don’t have them, desperate parents will flock to the internet and criminals will be waiting there,” said Hernan Albamonte, USA-IT Coalition.

“The counterfeit products aren’t made with the same quality plastics that the legitimate products are made of. they tend to break,” said Jay Kennedy, Michigan State Center for Counterfeiting and Protection. “What happens when plastic tends to break? The magnets will fall out of them and kids can ingest them.”

Read and watch here.

Seattle – A series of arrests over the last ten days has disrupted a multi-state methamphetamine and fentanyl distribution ring. The drugs were coming up from California and were being distributed in King, Pierce, Thurston, Lewis, Mason and Kitsap counties. The 18-month investigation revealed the drug trafficking organization was also distributing drugs to locations in the Southeastern United States including Florida, Arkansas and Tennessee.

“This drug organization trafficked two of the deadliest substances we are seeing in our community – fentanyl and methamphetamine,” said U.S. Attorney Nick Brown. “Members of the ring tried to trade drugs for firearms – ones they could transport to Mexico – contributing to terrible violence south of the border. These arrests are a significant step for community safety.”

According to records filed in the case, the investigation began in February 2020. Various people working with law enforcement provided information regarding the drug distribution activities. Aware of some of the group’s trafficking, law enforcement seized 10 pounds of methamphetamine in a traffic stop on May 16, 2020. Another 44 pounds of meth were seized in a stop on April 2, 2021, and 83 pounds of methamphetamine and 20,000 fentanyl pills were seized in a traffic stop on September 28, 2021. Additionally, on August 17, 2021, law enforcement seized 22 pounds of methamphetamine that conspirators attempted to mail to Fiji.

The alleged leaders of the drug distribution ring, Jose Maldonado-Ramirez, 33, and his fiancé, Iris Amador-Garcia, 30, of Bellflower, California, were arrested October 28, 2021. During a search of the residence where Iris Amador-Garcia was living with her brother and co-conspirator, Mario Amador-Garcia, 31, and co-conspirator, Bayron Eberto Garcia-Perez, 33, agents seized a kilogram of fentanyl or heroin, 80,000 pills of suspected fentanyl, and 2 firearms. Eight additional firearms were seized at search locations in Washington and California. Four other conspirators were taken into custody last week including:

Amado Pedro Castillo, 59, Brooklyn, New York

Jose Nolberto Bernal, 28, Kent, WA

Fernando Alcides Lopez-Mendez, 37, Los Angeles, CA

Justino Cruz-Victorio, 34, Joshua Tree, CA

Today, law enforcement made additional arrests of the distribution network:

Joseph Troy Easton, 42, Bremerton, WA

Angelique Marie Easton, 51, Bremerton, WA

Curtis Robert Griffin, 42, Belfair, WA

Dwayne Douglas George, 60, Spanaway, WA

Douglas Bryan Healer, 47, Port Orchard, WA

Jerry Wayne Kohl, 59, Tacoma, WA

One additional defendant was arrested today with 2 pounds of methamphetamine, three rifles, and a shotgun. An additional four guns were recovered at other search locations. Defendant Healer engaged in an armed stand-off with law enforcement today. This afternoon he was taken into custody at his Port Orchard residence without incident.

“The objectives of this operation were to hold those accountable for the menace of illegal narcotics trafficking, and the violence associated with it, which has plagued our communities for far too long in the state of Washington and throughout the Pacific Northwest,” stated DEA Special Agent in Charge, Frank Tarentino. “The DEA and our partners are focused on the most dangerous criminals in Washington. Today’s successful operation should give members of the community a level of comfort in knowing these violent offenders, who live and walk among us, won’t be putting their lives in danger any longer.”

“These warrants represent the continued efforts of IRS Criminal Investigation (IRS:CI) to ensure the safety of our communities,” said IRS:CI acting Special Agent in Charge Adam Jobes. “We are committed to working with our law enforcement partners to stop the widespread harm these illicit substances cause our friends, families, and neighbors.”

The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

These indictments are an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. The investigation was led by the Drug Enforcement Administration (DEA) Seattle Field Division (SFD) Tacoma Resident Office (TRO) and Bremerton Police Department (BPD), with assistance from Tahoma Narcotics Enforcement (TNET); the Seattle, Puyallup, Auburn, Federal Way, Kent, Bonney Lake, Tacoma, and Lakewood Police Departments; the Pierce County Sheriff’s Office; Washington State Department of Corrections; Joint Narcotics Enforcement Team (JNET): Centralia and Chehalis Police Departments; Valley Narcotics Enforcement Team (VNET); and Washington State Patrol; Thurston Narcotics Team (TNT), Kitsap County Sheriff’s Office, and Mason County Sheriff’s Office; United States Postal Inspections Service (USPIS), Internal Revenue Service Criminal Investigation (IRS-CI), and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) with support from Northwest High Intensity Drug Trafficking Areas ( HIDTA).

The case is being prosecuted by Assistant United States Attorneys Benjamin Diggs and C. Andrew Colasurdo.

NEW YORK, Nov. 1, 2021 /PRNewswire/ — Today, a coalition of private and public actors expanded the public education initiative to fight black-market trade entitled United to Safeguard America from Illegal Trade (USA-IT). The campaign is empowering local officials, law enforcement, and other leaders with new information and training programs and raising public awareness of the depth and severity of illegal trade.

USA-IT is expanding the initiative into Connecticut, Massachusetts, New Hampshire, and Tennessee—these four states join Arizona, California, Florida, Illinois, Louisiana, Michigan, Pennsylvania, and Texas, the states where USA-IT began its initiative. All face critical illegal trade issues.

To date, USA-IT has brought together nearly 60 national and state brand enforcement experts, law enforcement agencies, and leading business organizations dedicated to fighting illegal trade. Recently, the coalition was honored to welcome as new partners Crime Stoppers USA (CSUSA) and Grace Farms Foundation.

“Crime Stoppers of the United States of America is proud to partner in the fight against illegal trade,” said CSUSA’s Crimeline executive director Barb Bergin.

“I am proud to work with and support USA-IT. Illegal trade is a global threat to the people and the environment, harming both our economy and well-being. We have seen firsthand the expansion of the transnational organized crime syndicates in illegal goods, human trafficking, and wildlife trafficking. USA-IT is bringing together all the relevant parties in discussing and implementing effective strategies to combat this nefarious global threat,” said Rod Khattabi, chief accountability officer and justice initiative director at Grace Farms Foundation.

“In 2019, counterfeit goods robbed the U.S. economy of $131 billion and 325,500 jobs—but it doesn’t stop there. The same criminals who traffic in counterfeit and fraudulent products also traffic narcotics, guns, and even human beings. The black-market fuels organized criminal networks—including terror groups and drug cartels—while damaging our economy, businesses, and our communities,” said USA-IT spokesman and former director of U.S. Immigration and Customs Enforcement (ICE), Matt Albence.

“These criminals are nimble enough to avoid law enforcement, enterprising enough to continually establish new revenue streams, and dynamic in their execution. And no one government or industry can address this complex problem on its own. Tackling illegal trade requires cooperation and public-private partnerships, making full use of existing expertise, information sharing, innovative solutions, and evolving technologies,” added Albence.

Globally, the black market is a $464 billion-a-year business. Criminals get rich from illegal trade by robbing revenues meant to provide essential services to Americans. Instead of helping taxpayers, that money is used to fund the world’s most dangerous criminal enterprises. These groups exploit governments and citizens, manipulate financial systems, spur corruption, and cultivate instability and violence that threaten our communities.

Public actors, the private sector, and civil society alike all have a role to play. Only through cooperative efforts like USA-IT can we effectively ensure a safer, more secure, and more prosperous future.

For more information about USA-IT’s efforts to combat illegal trade and to get involved, visit USAIT.org or email us at [email protected].

For media requests, please email [email protected]

About USA-IT
United to Safeguard America from Illegal Trade (USA-IT) is a public- and private-sector partnership designed to help protect American security and prosperity from black-market criminals.

SOURCE United to Safeguard America from Illegal Trade (USA-IT)

Related Links

https://usait.org/

STERLING, Va. – Shipments with a voluminous amount of counterfeit consumer goods are usually transported in maritime cargo, so it was a bit surprising when Customs and Border Protection (CBP) officers encountered two women who arrived at Washington Dulles International Airport recently from Qatar with 806 counterfeit items packed into 21 checked suitcases.

The 806 items, which included fake designer brand jewelry, watches, clothes, shoes, sunglasses and handbags, under the brand names Christian Dior, Dolce & Gabbana, Fendi, Gucci, Hermes, Prada, and Versace, among others, would have had a combined manufacturer’s suggested retail price (MSRP) of $1,065,779, if authentic.

Even the 21 suitcases that the fake goods were packed into were counterfeit.

The two women, U.S. lawful permanent residents living in Virginia, arrived from Doha, Qatar on August 8. A CBP officer referred the women to a secondary examination area to complete a formal entry for the commercial goods in their baggage.

CBP officers then suspected that the goods were counterfeit and detained the goods for a more thorough inspection. Officers inventoried 806 items and submitted documentation of the inventory to CBP’s Consumer Products and Mass Merchandising (CPMM), and the Apparel, Footwear, and Textile (AFT) Centers of Excellence and Expertise.

CBP’s Centers of Excellence and Expertise, which are the agency’s trade experts, worked with trademark holders and by September 27 determined that all 806 pieces were counterfeit. CBP officers completed the seizure on September 29.

“This might be one of the most uniquely large counterfeit goods seizures that Customs and Border Protection officers have seen in regular passenger baggage,” said John Jurgutis, Acting Area Port Director for the Area Port of Washington, D.C. “We know that the illicit trade in counterfeit consumer goods steals revenue from American businesses, threatens consumers with potentially unsafe products, and funds transnational criminal organizations, and CBP officers will continue to strike back at this illicit enterprise while protecting American consumers.”

If you can buy anything online, how can you make sure that what you’re buying is genuine?

That’s a problem facing consumers and manufacturers alike. According to the NAM’s research, fake and counterfeit products cost the United States $131 billion and 325,000 jobs in 2019 alone—and estimates suggest that global trade in counterfeits exceeds $500 billion per year. The explosive rise of counterfeit goods has heavily impacted manufacturers, requiring them to fight back on a range of fronts.

For Clint Todd—the chief legal officer at Nite Ize, Inc., a manufacturer of mobile, pet and key accessories, as well as hardware, lighting and other products—that challenge is very real and only getting worse.

“In 2019, we took down 75,000 counterfeit listings and websites,” said Todd. “And we’re a small business, so you can guess how large the problem is countrywide.”

Why it’s happening: First, the online nature of e-commerce makes it more difficult to ensure accountability. Many counterfeit products are purchased through third-party sellers that may or may not provide real contact information.

• In practice, many platforms have not been held liable for counterfeit products sold on their platforms by these third-party sellers, even as they facilitate their sale. That means there’s often little manufacturers can do beyond asking the platforms to remove the listing.
• Second, a large proportion of the sellers of counterfeit goods are located in China and Hong Kong, making it much more challenging for U.S. companies to bring effective lawsuits, even if they do have accurate seller contact information.

“You have this odd confluence of laws and tech development and the involvement of another country that has driven this exponential increase in counterfeits,” said Todd. “You don’t have to be a rocket scientist to see how the inability to fight the problem has been detrimental to U.S. businesses.”

How manufacturers respond: Manufacturers and others have been forced into a piecemeal strategy that includes using software tracking services to find fraudulent trademarks and images; working with third-party sites to remove listings for knockoff merchandise; bringing lawsuits against counterfeiters where possible; and coordinating with the International Trade Commission. That strategy is challenging for lots of manufacturers but is particularly hard on small and medium-sized companies that may have fewer resources yet can be devastated when their products are ripped off.

What we need: The NAM’s report, “Countering Counterfeits,” details solutions for the federal government and the private sector, including:

• Requiring e-commerce platforms to reduce the availability of counterfeits;
• Modernizing enforcement laws and tactics to keep pace with counterfeiting technology;
• Streamlining government coordination;
• Improving private-sector collaboration; and
• Empowering consumers to avoid counterfeit goods.

As Todd put it, “It’ll take a multi-stakeholder approach. It’s not just the government. It’s not just manufacturers. It’s not just the online platforms. It has to be a coordinated approach with all those stakeholders to get to the heart of the matter.”

What the NAM is doing: The NAM is leading the effort against counterfeiting and has already made significant headway with policymakers. Among its recent highlights:

• After years of NAM advocacy, the Department of Homeland Security has implemented the Synthetics Trafficking and Overdose Prevention (STOP) Act of 2018, which steps up screenings for international mail shipments—one way in which counterfeits get into the U.S.
• In late 2020, Congress also implemented several NAM recommendations, including bolstering federal oversight at U.S. ports; cracking down on scammers and other bad actors exploiting the pandemic by producing fake goods or engaging in price gouging; and allowing the FDA to seize and destroy dangerous counterfeit medical devices.
• Both the Senate and House have seen the introduction of bipartisan bills that incorporate NAM recommendations on addressing the sale of counterfeits through online platforms.

The last word: “People need to understand the scope of the problem and how pervasive it has become,” said Todd. “Everyone needs to know how often counterfeits and knockoffs are affecting U.S. companies and how expensive and difficult it is to combat the problem with the tools we have at our disposal now.”

Established as an independent agency of the U.S. government in 2000, the United States-China Economic and Security Review Commission (USCC) provides recommendations on bilateral trade with the People’s Republic of China, evaluates security and trading risks across all industries, and conducts research on China’s actions. One of the issues examined by the USCC is the role of Chinese companies in supplying the fentanyl that has fueled the fake pill and fentanyl epidemic in the U.S.

In 2017, USCC issued its first report on the export of fentanyl, directly linking the chemicals flowing out of China to increases in overdoses, deaths, and rates of addiction in the U.S. The second report, released in 2018, found that China continued to be the primary source for fentanyl and fentanyl-like substances in the U.S. The newest report, released in August 2021, found Chinese companies adapting to a changing legal framework to maintain their prominent status as suppliers, and even venturing into money-laundering services.

Chinese Manufacturers Adapting To Changing Regulations And More Aggressive Law Enforcement

In April 2019, China agreed to schedule all fentanyl and fentanyl analogues forcing Chinese manufacturers to pivot. There was a decline in Chinese manufacturers “willing to sell/export [finished] fentanyl products,” according to David Prince, deputy assistant director of transnational organized crime at U.S. Immigration and Customs Enforcement. Seizures of smaller but significantly purer quantities of fentanyl in the international mail dropped off in 2019.

Instead, Chinese manufacturers shifted to producing and creating additional precursor ingredients that could be synthesized into fentanyl by chemists employed directly by the drug trafficking organization (DTO) in Mexico or Canada. DTOs could then mix the fentanyl into illicit drugs or press it into counterfeit pills, which are then smuggled into the U.S., mainly across the southern border.

Additionally, Chinese manufacturers continue to evade detection by relocating some manufacturing to India, shipping precursor ingredients through third countries, and utilizing marketing schemes to avoid detection. If China were to better supervise and regulate its chemical and pharmaceutical industry, these types of maneuvers would be detected and stopped.

Chinese Criminal Groups Begin Assisting Mexican Cartels With Money Laundering

The partnership between Chinese chemical companies and their DTOs purchasers is tight enough that they have ventured into a new service: laundering cartel money through the Chinese banking system. Illegal enterprises need to find ways to make their profits appear legitimate, and Chinese money launderers are now working with Mexican DTOs to fill this need. Drug profits flow from Mexico to China. The country’s opaque financial system obscures its origins before the money launderers return it to the Mexican DTOs, minus a cut for the launderers. For example, in November 2018, U.S. authorities arrested a Chinese national in Chicago who allegedly laundered between $25 – 65 million for one cartel. Money launderers use multiple complex techniques to hide the origins of illicit profits, including mirror transactions, virtual currencies, and the purchasing of consumer goods, which are then shipped to the DTOs.

Official Cooperation Between The U.S. And China Begins To Yield Success

The USCC report noted that enforcement cooperation between the U.S. and China has improved. China scheduled all forms of fentanyl, participates in counternarcotic working groups, and complies with U.S.’s request for Advanced Electronic Data on international shipments. However, the statements of cooperation made by politicians have not always directly translated to better working relationships for federal agents on the ground, especially in enforcement and criminal prosecution. In 2020, a report by the State Department said that “China has not cooperated sufficiently on financial investigations and does not provide adequate responses to requests for financial investigation information.” Despite both the U.S. and China being signatories on a mutual legal assistance treaty, the State Department pointed out that “Many outstanding requests by both the United States and China remain unfulfilled,” further hindering U.S.-China cooperation efforts.

U.S. law enforcement has forced the Chinese criminal and chemical industry to adapt. The Chinese chemical industry remains a potent force in the creation of fentanyl that finds its way into the U.S. and kills Americans and eliminating this line of business will take additional years of work from both law enforcement, regulators, and diplomats before we see a change.

While the debate over sanctuary cities and migration made the headlines Tuesday, President Joe Biden’s nominee to be America’s top border cop used his appearance before the Senate Finance Committee to call out a country far from the border for its role in counterfeit goods and illegal drugs: China.

Tucson Police Chief Chris Magnus, nominated to lead the Customs and Border Protection Agency, was questioned about the trade and commerce aspects of his duties by committee members, including Sen. Maggie Hassan (D-N.H.).

“U.S. Customs and Border Protection has an important role in disrupting international drug smuggling operations and interdicting the flow of drugs and money across the U.S. border,” Hassan said, noting that opioid addiction “is ravaging my state of New Hampshire.”

Asked what he would do as CBP director to fight international drug trafficking, Magnus said he was well aware of the problem of fake pharmaceuticals, particularly those made with fentanyl and other opioids, and he pointed a finger at China.

“We should touch on e-commerce, where we know that there are many opioids and precursors of such that are coming through in small packages,” Magnus said. “Many times through the Postal Service because of relationships that are complicated involving China.

“There are a whole series of ways in which we can do more to address the scourge.”

“China remains the primary source of fentanyl and fentanyl-related substances trafficked through international mail and express consignment operations environment, as well as the main source for all fentanyl-related substances trafficked into the United States,” according to the U.S. Drug Enforcement Agency (DEA).  The danger from these drugs, which have migrated to mainstream e-commerce sites like Amazon and eBay, has become so great the agency issued a rare public alert last month.

“The Drug Enforcement Administration warns the American public of the alarming increase in the lethality and availability of fake prescription pills containing fentanyl and methamphetamine,” the alert reads. “International and domestic criminal drug networks are mass-producing fake pills, falsely marketing them as legitimate prescription pills, and killing unsuspecting Americans.”

The agency has seized more than 9.5 million counterfeit pills so far this year, and “the number of DEA-seized counterfeit pills with fentanyl has jumped nearly 430 percent since 2019,” it reported.

“DEA laboratory testing further reveals that today, two out of every five pills with fentanyl contain a potentially lethal dose.”

Meanwhile, the U.S. Chamber of Commerce estimates China is the source of 86 percent of the world’s counterfeit goods, much of it shipped directly to customers in the United States.

The problem of e-commerce counterfeiting has gotten so big that private businesses are banding together to network with law enforcement in the fight. One organization, United to Safeguard America from Illegal Trade (USA-IT), recently hosted a roundtable on “The Dark Side of Cybercrime” to help warn businesses and consumers of the dangers.

INTERNATIONAL FALLS, Minn. — U.S. Customs and Border Protection (CBP) Office of Field Operations officers at the International Falls Port of Entry targeted a rail container destined to arrive in Ranier, Minnesota.  The officers inspected the rail container and discovered pizza ovens which were in violation of intellectual property rights (IPR) regulations.

You buy a knock-off Louis Vuitton purse from a street vendor in Philadelphia or over the internet, thinking, ‘Who does it hurt?’ Well, think again. You might be funding a terrorist group like Hezbollah, or violent gangs or drug cartels.

That was one takeaway from a recent cybercrime webinar hosted by InsideSources with experts from United to Safeguard America from Illegal Trade (USA-IT).

“Cybercriminals are opportunists, always seeking to capitalize on current events,” according to the Philadelphia FBI office. “From the very beginning of the pandemic, they have exploited people’s increased use of technology, fears about COVID, and financial uncertainty, using every brand of scheme imaginable to defraud victims. Based on 2020 data from the FBI’s Internet Crime Complaint Center, which saw a huge spike in complaints last year, Pennsylvania was again one of the top 10 states in terms of the number of victims reporting scams and the total amount of monetary loss reported.”

And an FBI report said the agency received a record number of cybercrime complaints from the American public in 2020: 791,790, with reported losses exceeding $4.1 billion. That represents a 69 percent increase in total complaints from 2019.

Business e-mail compromise schemes continued to be the costliest: 19,369 complaints with an adjusted loss of approximately $1.8 billion. Phishing scams were also prominent: 241,342 complaints, with adjusted losses of over $54 million. The number of ransomware incidents also continues to rise, with 2,474 incidents reported in 2020.

The average loss from cybercrime in Pennsylvania per victim is $5,822.

During the USA-IT roundtable, Hernan Albamonte, head of illicit trade prevention for Philip Morris International, warned: “Illegal trade is not a petty crime. Illegal trade undermines democracy, corrupts the rule of law, jeopardizes economic development strategies, contributes to human rights abuses…It is a growing threat to our national security and impacts every law-abiding American.”

In 2019, the counterfeit trade robbed the U.S. economy of more than $131 billion.

Bill Schenkelberg of Red Sky Alliance is one of the white hats trying to stand in the bad guys’ way. While many larger corporations have hardened their networks, hackers are able to penetrate through the supply chain of smaller companies and also through workers who, during the pandemic, worked remotely from their homes.

“Cyber touches every single point of that supply chain,” said Schenkelberg. Stolen and counterfeit products are sold on websites on the dark web and also legitimate sites like eBay and Amazon.

“The dark web marketplaces, these are nothing more than places to go shopping for illegal products and stolen information,” said Schenkelberg. While these sites are similar to legitimate online shopping sites.  While a stolen purse won’t hurt you, ingesting a counterfeit medicine might very well be a fatal mistake.

“A purchaser cannot, and should not, trust the safety and efficacy of these drugs,” he said. “It’s a major public health risk.”

Itai Galmor with Brandshield, a company that helps deal with online risks, said the scams and frauds and phishing connect to each other.

“They’re here to steal money,” he said. COVID-19, with more people working from home, has brought a large increase in cybercrime, he said.

“We managed to take down 150 websites in a single month,” he said.

There was a huge surge in domain registrations with the word vaccine in them in December 2020, many to create scams.

“It’s really shifted into social media,” he said. “Social media is the place where it happens.”

Matt Albence, a spokesman for USAIT, said, “Most of these counterfeit goods are not being produced in the United States. They’re being produced elsewhere, in China, in Asia, and they’re transiting around the world to come into the United States.”

The products are coming across the border but also through the mail. As well as the monetary loss to legitimate businesses and to governments, there is also a security issue, said Albence, former acting director of Immigration and Customs Enforcement (ICE).

“A lot of this money is going to fund these transnational criminal organizations,” he said. “And most of these organizations do not specialize in one or two types of crime. They’re not just peddling fake Viagra or fake Gucci purses. They are using those funds to support all sorts of other nefarious criminal activity. From a public safety and national security standpoint, looking at narcotics trafficking, human trafficking—it’s estimated to be a $150 billion a year industry.”

“These are ruthless criminal organizations,” he said. “They do not care about individuals or people, whether it’s the people utilizing their products on the backend, whether they’re safe medications, fake drugs laced with God knows all sorts of chemicals—You see what Fentanyl’s done to this country…There have been links time and time again to the sale of counterfeit goods, stolen cigarettes to terrorist organizations, Hezbollah,  Isis, Al-Qaeda, to drug cartels down in Mexico…all tied in, making profits, or leveraging these profits from counterfeit goods, this illicit trade, and using to further their other criminal activities or terrorist activities.”

Asked how consumers can protect themselves, Albence said if a deal is too good to be true it probably isn’t legit.

The COVID-19 era brought a record number of drug overdose deaths — more than 93,000 last year — fed in part by a surging cybercrime industry selling fake pharmaceuticals.

The Drug Enforcement Administration (DEA) just issued a public warning over the growing number of fake pills bought online, some of which are laced with potentially lethal amounts of the synthetic opioid fentanyl. Cybercrime experts say it’s just the latest sign of how big the problem has become, and how little law enforcement can do to stop it.

Millions of counterfeit medications have been confiscated just this year, many of them containing lethal doses of fentanyl. If you are wondering how much fentanyl is too much, the DEA said a deadly dose is “small enough to fit on the top of a pencil.”

According to the alert, “counterfeit pills are illegally manufactured by criminal drug networks and are made to look like real prescription opioid medications such as oxycodone (Oxycontin®, Percocet®), hydrocodone (Vicodin®), and alprazolam (Xanax®); or stimulants like amphetamines (Adderall®).

“Fake prescription pills are widely accessible and often sold on social media and e-commerce platforms – making them available to anyone with a smartphone, including minors,” the DEA reports.

“A lot of that is happening because people are taking things and they don’t expect it to be there,” Matt Albence, former acting Director of U.S. Immigration and Customs Enforcement (ICE), told a cybercrime roundtable last week hosted by United to Safeguard America from Illegal Trade (USA-IT).

USA-IT is a public-private partnership working to fight black market trade. The challenge, Hernan Albamonte of Philip Morris International told the roundtable, is that social media and online sales put potentially dangerous counterfeit products right at the average websurfer’s fingertips.

“It is a growing threat to our national security and it impacts every law-abiding American,” said Albamonte. “The criminals are nimble enough to avoid law enforcement and strong enough to recruit vulnerable citizens.”

According to the DEA’s public alert, the first it issued since 2015, the majority of the pills confiscated in the U.S. are made in Mexico with chemicals provided by China. Albence, whose background is in law enforcement, said that’s the trend he’s observed. And, he added, the money Americans spend on these counterfeit goods ends up abroad as well. And not in friendly hands.

“A lot of this money is going to support these transnational criminal organizations,” Albence said. “It’s not a victimless crime.”

And it’s reaching into the heartland. Just days before the DEA announcement, police in the Seattle suburb of Burien, Wash. seized 41,530 fentanyl-laced tablets in a single arrest.

In Minnesota, DEA investigators have seized approximately 74,000 pills in 2021, up from fewer than 1,500 pills seized just three years ago.

“This is not an East Coast or West Coast problem, but one that the entire nation is facing,” DEA Omaha Division Special Agent in Charge Justin C. King said in a statement. “We’re seeing these pills in our own Midwestern communities.”

And according to the USA-IT panelists, the common denominator is the ability to use the internet, particularly popular sites like Amazon and eBay, to sell counterfeit products. With the rapid increase in e-commerce, cybercrime is another source of income for criminal enterprises from schemes like phishing attacks to ransomware to selling counterfeit and stolen products online through marketplaces we usually order from every day.

“Cyber touches every single point of the supply chain,” Bill Schenkelberg of Red Sky Alliance told the panel. And as for consumers looking online to save money on medications? “A purchaser cannot and should not trust the safety and efficacy of these drugs. It’s a major public health risk.”

The net impact is real risks to customers and real damage to American businesses.

“In 2019, counterfeit products alone robbed the U.S. economy more than $131 billion and more than 325,500 jobs as well,” said Albamonte. “Those revenues should have been used to build roads, help hospitals fight the pandemic outbreaks, or improve our schools. Instead, criminals are getting rich.”

So, what should consumers be on the lookout for when shopping for products?

“Check the directions, especially with medications, and see if there are misspelled words or punctuation marks,” said Albence, who also said to note the price as well. “If it’s listed for $100 on legitimate websites and $35 on another, there is something wrong there.”

“It’s not a victimless crime, and it’s not just a guy selling fake Rolex watches for $25,” Albamonte added. “That money goes to really bad people that want to do really bad things.”

DEA Warns that International and Domestic Criminal Drug Networks are Flooding the United States with Lethal Counterfeit Pills

September 27, 2021 – The Drug Enforcement Administration warns the American public of the alarming increase in the lethality and availability of fake prescription pills containing fentanyl and methamphetamine. International and domestic criminal drug networks are mass-producing fake pills, falsely marketing them as legitimate prescription pills, and killing unsuspecting Americans. These counterfeit pills are easy to purchase, widely available, and often contain deadly doses of fentanyl. Pills purchased outside of a licensed pharmacy are illegal, dangerous, and potentially lethal. This alert does not apply to legitimate pharmaceutical medications prescribed by medical professionals and dispensed by pharmacists.

DEA and its law enforcement partners are seizing deadly fake pills at record rates. More than 9.5 million counterfeit pills were seized so far this year, which is more than the last two years combined. Officials report a dramatic rise in the number of counterfeit pills containing at least two milligrams of fentanyl, which is considered a deadly dose. The number of DEA-seized counterfeit pills with fentanyl has jumped nearly 430 percent since 2019, a staggering increase. DEA laboratory testing further reveals that today, two out of every five pills with fentanyl contain a potentially lethal dose. Additionally, methamphetamine is increasingly being pressed into counterfeit pills.

Some of the most common counterfeit pills are made to look like prescription opioids such as oxycodone (Oxycontin®, Percocet®), hydrocodone (Vicodin®), and alprazolam (Xanax®); or stimulants like amphetamines (Adderall®). Fake prescription pills are widely accessible and often sold on social media and e-commerce platforms – making them available to anyone with a smartphone, including teens and young adults. These counterfeit pills have been seized by DEA in every U.S. state, and in unprecedented quantities.

Drug traffickers are using fake pills to exploit the opioid crisis and prescription drug misuse in the United States, bringing overdose deaths and violence to American communities. According to the Centers for Disease Control and Prevention, last year more than 93,000 people died of drug overdoses in the United States, marking the largest number of drug-related deaths ever recorded in a year. Fentanyl, the synthetic opioid most commonly found in counterfeit pills, is the primary driver of this alarming increase in overdose deaths. Drug trafficking is also inextricably linked with violence. This year alone, DEA seized more than 2700 firearms in connection with drug trafficking investigations – a 30 percent increase since 2019. DEA remains steadfast in its mission to protect our communities, enforce U.S. drug laws, and bring to justice the foreign and domestic criminals sourcing, producing, and distributing these deadly fake pills.

The only safe medications are ones prescribed by a trusted medical professional and dispensed by a licensed pharmacist. Any pills that do not meet this standard are unsafe and potentially deadly. DEA has launched the public awareness campaign, One Pill Can Kill, to educate the public on dangers of counterfeit pills and how to keep Americans safe. For more information, visit DEA.gov/onepill.

**The Drug Enforcement Administration ensures the safety and health of the American public by fighting against violent criminal drug networks and foreign cartels trafficking in illicit drugs. To accomplish that mission, the Drug Enforcement Administration employs approximately 10,000 men and women throughout the world – Special Agents, diversion investigators, intelligence analysts, and chemists – across 239 domestic offices in 23 U.S. divisions and 91 foreign offices in 68 countries.  

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CHICAGO— Sports memorabilia is a lucrative business. Fans and collectors pay top dollar for memorabilia to add to their collection or pass down to future fans. However, this business does have its phony dealers that peddle their counterfeit merchandise cashing in at the expense of collectors and fans.

On September 13, U.S. Customs and Border Protection (CBP) officers at the Chicago port of entry seized a shipment from China that contained 86 championship rings. Chicago’s Trade Enforcement Team and CBP’s trade experts at the Centers of Excellence and Expertise determined the rings were counterfeit due to the fact that all of the goods were constructed of poor quality and lacked security features. The shipment was destined for a residence in Florissant, Missouri.

“Shipments like these prey on the many sports fans across the nation who may be scammed into paying high prices for fake memorabilia,” said LaFonda Sutton-Burke, Director, Field Operations, Chicago. “I’m extremely proud of these officers’ determination in stopping illicit shipments, and our commitment to protecting the American economy.”

The parcel contained fake championship rings from the Chicago Bulls (24), New York Yankees (34), St. Louis Cardinals (22), and the Philadelphia Eagles (6). Had the rings been authentic, the Manufacturer’s Suggested Retail Price would have been $2.38 million.

Intellectual Property Rights (IPR) enforcement is a Priority Trade Issue. Importation of counterfeit merchandise can cause significant revenue loss, damage the U.S. economy, and threaten the health and safety of the American people. In partnership with Immigration and Customs Enforcement, CBP seized 27,599 shipments with IPR violations in fiscal year 2019. If the seized products were genuine, the total manufacturer’s suggested retail price of the items would have been valued at over $1.5 billion.

Over the past five years, e-commerce has grown exponentially as consumers are increasingly completing purchases online. These purchases are typically shipped through international mail and express courier services.

Sold in underground outlets and on third party e-commerce websites, counterfeit commodities fund smugglers and members of organized crime. Consumers often believe they are buying a genuine product but soon realize the item is substandard and potentially dangerous.

“Counterfeiters easily hide in plain sight on online marketplaces. They dupe shoppers into buying low quality and dangerous counterfeits online,” said Shane Campbell, Area Port Director – Chicago. “CBP employees work tirelessly to protect our economy and consumers every day.”

CBP Trade protects the intellectual property rights of American businesses through an aggressive Intellectual Property Rights enforcement program, safeguarding them from unfair competition and use for malicious intent while upholding American innovation and ingenuity. Suspected violations can be reported to CBP here.

If you are aware of, or suspect, a company or individual of infringing upon a trademark or copyright, please report the suspected violation to e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.

A Chinese national and naturalized U.S. citizen pleaded guilty yesterday to his involvement in a conspiracy to launder at least $30 million in drug proceeds on behalf of foreign drug-trafficking organizations. Another Chinese national was sentenced to seven years in prison today for his role in the same conspiracy.

According to court documents, Xizhi Li, 48, played a leadership role within a years-long conspiracy to use a foreign casino, foreign and domestic front companies, foreign and domestic bank accounts, false passports and other false identification documents to launder money on behalf of transnational drug-trafficking organizations, whose main drug-trafficking activities involved cocaine. The defendant dealt directly with members of drug-trafficking organizations or their representatives to obtain and service “contracts” to move their drug proceeds. Once the defendant and his co-conspirators obtained a “contract” to launder drug proceeds, they would engage in financial transactions that were designed to conceal the illicit source of the original funds, in return for the payment of commissions.

“The defendants laundered millions of dollars on behalf of drug traffickers through the global financial system in a manner that concealed the source and nature of the illicit funds,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Global money-laundering networks enable drug cartels to profit from their deadly trade, and yesterday’s guilty plea and today’s sentence underscore the Justice Department’s commitment to dismantling the financial infrastructure of transnational criminal organizations to take the profit out of crime. This plea and sentence would not have been possible without the tireless efforts of our federal law enforcement partners and the United States Attorney’s Office for the Eastern District of Virginia.”

“This prosecution demonstrates the enormous value of collaborating with agencies across the government and with our international partners to dismantle and hold accountable transnational criminal organizations that pose a significant danger to the public,” said Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia. “The far-reaching conspiracy in this case involved the laundering of millions of dollars of illegal proceeds on behalf of transnational drug-trafficking organizations through the use of a casino, front companies, foreign and domestic bank accounts, false identification documents, and bulk cash smuggling. We greatly appreciate the essential and innumerable contributions from our partner agencies, all of whom worked closely together to thoroughly follow the facts and evidence that led to the unraveling of this multimillion-dollar money-laundering scheme.”

“DEA’s mission is to make our communities safer and healthier, which means bringing to justice the most dangerous individuals and organizations that traffic drugs in the United States and around the world,” said Administrator Anne Milgram of the Drug Enforcement Administration. “Through the collective efforts of the DEA and our law enforcement partners, we relentlessly pursue individuals, like the one here, who allegedly laundered more than $30 million in drug profits.”

“The successful outcome of this complex, multi-year investigation is owed to dogged determination by the dedicated men and women of the Drug Enforcement Administration, working closely with our federal law enforcement partners,” said Special Agent in Charge J. Todd Scott of DEA’s Louisville Division. “We will continue to be relentless in our efforts to stop transnational criminal organizations from operating within our borders, and we will use every tool available in our mission to protect the American people.”

Co-defendant Tao Liu, 46, of Hong Kong, helped to execute the money laundering scheme. At times, Liu accepted bulk drug cash on behalf of Xizhi Li, which he later deposited into bank accounts that Li provided. Additionally, Liu was the target of a months-long undercover investigation during which he attempted to bribe what he believed was a corrupt U.S. Department of State official to obtain U.S. passports for individuals, including Liu himself, who were not otherwise entitled to use or possess such documents. This purportedly corrupt official was actually an undercover DEA agent. Liu agreed to pay $150,000 per passport as part of this scheme.

Li pleaded guilty to conspiracy to launder money. He is scheduled to be sentenced on Oct. 26 and faces a maximum penalty of 20 years in prison as well as a $10-million forfeiture money judgment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Liu pleaded guilty to his role in the conspiracy and a separate bribery charge on April 14 and was sentenced today to seven years in prison.

On April 14, co-defendants Jiayu Chen, 46, of Brooklyn, New York, and Jingyuan Li, 49, of San Gabriel, California, pleaded guilty to their roles in the conspiracy. On July 20, Chen was sentenced to 60 months’ imprisonment and ordered to forfeit $2.8 million dollars.

Additionally, on June 16, Eric Yong Woo, 43, of Alhambra, California, also pleaded guilty to his role in the money-laundering conspiracy. He is scheduled to be sentenced on Sept. 21 and faces a maximum penalty of 20 years in prison.

Finally, Jianxing Chen, 40, of Belize, was charged in the superseding indictment for his alleged involvement in this money-laundering and drug-trafficking conspiracy. He is pending extradition following his arrest in Lima, Peru. Chen was captured with significant assistance from The International Criminal Police Organization (INTERPOL).

The DEA’s Louisville Division and the DEA’s Special Operations Division–Bilateral Investigations Unit are investigating this case, with assistance from the DEA’s Office of Special Intelligence, Document and Media Exploitation Unit and the DEA’s offices in New York, Chicago, Los Angeles, Houston, Omaha, Atlanta, Newark, Portland, Dallas, Mexico City, Merida (Mexico), Guatemala City, Belmopan (Belize), Beijing, Hong Kong, Jakarta (Indonesia), Manila (Philippines), Tokyo, Seoul, Bangkok, Lima (Peru), and Canberra (Australia). The U.S. Department of State’s Diplomatic Security Service (DSS), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Postal Inspection Service, Interpol, and U.S. Customs and Border Protection National Targeting Center (CBP – National Targeting Center) were partners in the investigation of this case.

Assistant U.S. Attorneys David A. Peters and Michael P. Ben’Ary and Trial Attorneys Kerry Blackburn, Mary K. Daly, and Stephen A. Sola of the Justice Department’s Money Laundering and Asset Recovery Section are prosecuting the case.

The Justice Department’s Office of International Affairs provided significant assistance. The Australian Criminal Intelligence Commission, the Australian Federal Police, the Australia Department of Home Affairs, the Mexican Federal Police, the Guatemalan National Civil Police and the New Zealand Police also provided significant assistance.

This prosecution is part of two Organized Crime Drug Enforcement Task Force (OCDETF) investigations. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Tobacco industry executive Hernan Albamonte takes us through the 2020 “Guerra Contraband Cigarettes” case – the largest seizure of tobacco products in U.S. history. Here he introduces us to a unique brand protection challenge, that of “illicit “whites” which are cigarettes that have no branding or are off-branded. Hernan also addresses other complications in enforcement caused by loopholes and the unintended issues with free trade zones; and finally Hernan answers why we should care about tobacco, speaking to the underground criminal networks that use high demand products as illegal currency to fund their operations.

BALTIMORE – The U.S. Attorney’s Office for the District of Maryland seized fraudulent websites that contained numerous uses of the legitimate Walmart trademarked logo and appearing to mimic a legitimate Walmart website.

The fraudulent websites allegedly offer a number of drugs for sale for the experimental and unapproved treatment or prevention of COVID-19. Instead, the domains were allegedly used to collect the personal information of individuals visiting the sites in order to use their information for nefarious purposes, including fraud, phishing attacks and/or deployment of malware. Individuals visiting the sites will now see a message that the site has been seized by the federal government. These are the 12th and 13th COVID fraud related domain names seized by the Maryland U.S. Attorney’s Office and Homeland Security Investigations (HSI).

The seizures of the domain names were announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Special Agent in Charge James R. Mancuso of Homeland Security Investigations Baltimore Field Office.

“When it comes to cyber fraudsters, dismantling their online platform is as good as destroying their business,” said James Mancuso, Special Agent in Charge for HSI Baltimore Field Office. “As soon as HSI identifies a malicious website we work to investigate the crime and pursue a criminal prosecution with the U.S. Attorney’s Office. By doing so we are denying these offenders the ability to commit more schemes and exploit more people.”

According to the affidavit filed in support of the seizure, the seized sites both purported to be the retail chain Walmart. One site, “https://pharmacywalmart.com,” was explicitly named to appear to be Walmart while the other, “https://stromectol-ivermectin.com,” would redirect users to “https://en.pharmacywalmart.com/buy-stromectol-usa.html.” The HSI Intellectual Property Rights Center and the HSI Cyber Crimes Center discovered the apparent website “https://stromectol-ivermectin.com” which redirected to an internal webpage of “pharmacywalmart.com.” A domain analysis conducted by HSI indicated that pharmacywalmart.com was created on November 4, 2019, from a registrant located in Russia.

The HSI Cyber Operations Officer (COO) also noted the phone number “+1-718-475-90-88” on the pharmacywalmart.com website, and while the area code for this number is New York City, the format provided does not match that of a typical United States based phone number. Pharmacywalmart.com purports to offer for sale a number of drugs, including Stromectol (Ivermectin), Aralen (Chloroquine) and Kaletra (Lopinavir and Ritonavir), for the experimental and unapproved treatment or prevention of COVID-19.

As detailed in the affidavit filed in support of the seizure, Stromectol is the brand name of Ivermectin which is a prescription medication used to treat certain parasitic infections; Aralen is a brand name for chloroquine, most commonly used for the treatment and prevention of malaria; and Kaletra is the brand name of a combination of Lopinavir and Ritonavir which are prescription medications that are approved to treat human immunodeficiency virus 1 (HIV-1). None of those drugs are an approved preventative or treatment for COVID-19. On the page offering Kaletra for sale, the subject domain name contained the following: “In 2020, after laboratory research, it was found out that Kaletra shows positive results in a blockage of a COVID-19 viral replication.” The affidavit alleges that this statement is not supported by trials or the U.S. Food and Drug Administration.

Neither domain name is authorized by Walmart to use their intellectual property or offer their products for sale. By seizing the sites, the government has prevented third parties from acquiring the names and using it to commit additional crimes, as well as prevented third parties from continuing to access the sites in their present form.

HSI launched Operation Stolen Promise in April 2020 to protect the Homeland from the increasing and evolving threat posed by COVID-19-related fraud and criminal activity. As of May 2021, the agency has seized more than $49 million in illicit proceeds; made 281 arrests; executed over 200 search warrants and analyzed more than 80,000 COVID-19 related domain names. Working with U.S. Customs and Border Protection, more than 2,100 shipments of mislabeled, fraudulent, unauthorized or prohibited COVID-19 test kits and other related items have been seized. For its role in the operation, HSI’s Cyber Crimes Center applies technological, operational, and criminal investigative expertise, products and services to target the criminals and organizations attempting to commit cybercrimes and exploitation related to COVID-19.

HSI is a directorate of U.S. Immigration and Customs Enforcement (ICE) and the principal investigative arm of the U.S. Department of Homeland Security, responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 Special Agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.

Federal law enforcement agencies are united in our efforts to fight against COVID-19 fraud. HSI has identified tips to recognize and report COVID-19 fraud. If you believe you are a victim of a fraud or attempted fraud involving COVID-19, you may also call the National Center for Disaster Fraud Hotline at 1-866-720-5721 or for more information visit justice.gov/coronavirus.

David M. Luna, founder and executive director of The International Coalition Against Illicit Economies (ICAIE) and USA-IT partner, discusses illegal trade’s economic and societal costs and how we can work together to fight back:

“The lucrative criminal activities enabling and fueling the multitrillion-dollar illicit economies include the smuggling and trafficking of narcotics, opioids, weapons, humans, counterfeit and pirated goods; illegal tobacco and alcohol products; illegally harvested timber, wildlife and fish; pillaged oil, diamonds, gold, natural resources and precious minerals; and other contraband commodities. Such contraband and illicit goods are sold on our main streets, on social media, in online marketplaces and on the dark web every minute of every day.  The United Nations has estimated that the dirty money laundered annually from such criminal activities constitutes up to 5 percent of global gross domestic product, or $4 trillion.”

“These illicit economies divert revenue from legitimate market drivers such as businesses and governments and impair the ability of communities to make the investments necessary to stimulate economic growth, especially during these hard economic times.  Revenue that could be used to build roads to facilitate commerce, hospitals to fight pandemic outbreaks and diseases, homes to raise and protect families or schools to educate children and future leaders, is instead lost to criminals’ greed crimes.”

“We also need more holistic whole-of-society approaches in order to strengthen the political will in risky markets, confiscate criminally derived proceeds, promote information sharing, coordinate actionable intelligence across borders and develop more innovative and smarter global supply chain solutions to combat illicit pathways.”

“The international community must harness greater attention, partnerships and collective action to tackle these inter-connected threats that impact us all. There are no global problems that can be solved by any one partner working alone. That’s why ICAIE is proud to support the United to Safeguard America from Illegal Trade public education initiative, and other public and private sector partnerships, working to protect American security and prosperity from black markets and the filthy lucre of criminals.”

Read more here.

USA-IT partners featured in Convenience Store News to discuss the coalition’s efforts:

“Pennsylvania’s food and beverage retail industry is no stranger to the challenges posed by criminals operating in the black market. Organized retail theft is a growing problem here in Pennsylvania and across the country,” said Alex Baloga, president and CEO of the Pennsylvania Food Merchants Association. “No company or organization can singlehandedly defeat this problem. Only through partnerships between the public and private sectors like USA-IT can we finally rein in the criminal networks harming our communities through illegal trade.”

The Florida Petroleum and Marketers Association stated, “We have a long history of working collaboratively with law enforcement agencies and other stakeholders to combat threats to hard-working business owners and this effort is a great example of that work,” the association said.

Read more here.