Federal Officials Crack Down on Super Bowl Counterfeiters

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/ Source: CNBC.com

As the Seattle Seahawks and New England Patriots prepare for the biggest clash of the season, federal cops are squaring off against counterfeiters.

Agents from the Department of Homeland Security are working undercover with local officials across the Phoenix area, looking for fake NFL goods being sold to fans. So far, Operation Team Player has resulted in 52 arrests. On Thursday, U.S. Immigration and Customs Enforcement (ICE) announced that in 2014, its agents seized more than 326,000 items of counterfeit sports merchandise, valued at $19,507,240.

"When it affects the economy of the United States, it's not just a local issue," said William K. Brooks, director of field operations for the Tucson, Arizona, field office of U.S. Customs and Border Protection.

While counterfeiting may appear to be a victimless crime for sports fans hoping to scoop up team spirit on the cheap, authorities say it's anything but.

"It hurts American jobs, it hurts the American economy and it hurts safety of the public."

"It hurts American jobs, it hurts the American economy and it hurts safety of the public," said Joe Macias, director of the Intellectual Property Rights Center, a multiagency task force lead by ICE, which is a division of Homeland Security. "Counterfeiting affects more than just the local economy. You are putting money into serious criminal networks."

Licensed sports apparel is big business for the NFL, with analysts estimating annual revenue from legitimate goods at $3 billion. "When you are talking about an event that will do between $100-$200 million in retail—it's a major issue," said Marty Brochstein, a senior vice president at the International Licensing Industry Merchandisers' Association. "It's not only lost revenue, but it's about brand image."

Problem has exploded

Just how big is the counterfeiting problem? According to the International Anti-Counterfeiting Coalition (IACC), the Department of Homeland Security seized counterfeit goods valued at a total of more than $1.7 billion at U.S. borders in 2013, spanning across multiple industries.

"It's a problem that has grown over 10,000 percent in the past two decades, in part fueled by consumer demand," according to a 2012 IACC report.

In the week leading up to the Super Bowl, as authorities step up their efforts, they have seized more than 3,000 fake items with a total market value of more than $100,000. The fakes are being sold on street corners, from private vehicles, even out of kiosks in malls.

"It affects everyone in the chain," Macias said. "From the UPS driver who is having his hours cut because of less deliveries, to the legit mom-and-pop shop just trying got make it and figure out why they can't sell the item at fair market value because they are being undercut by counterfeiters."

Consumers worried about accidentally buying a fake should keep in mind that typically, the weight and fabric of fake merchandise have a different feel than licensed merchandise. Also look at the stitching—counterfeiters often don't take the time to lift the needle out between letters on fake jerseys.

"We are working to protect our fans, protect the legitimate businesses, retailers, licensees who pay taxes, support the local economy and play by the rules," said Dolores F. DiBella, counsel for the NFL. "We are protecting fans who expect high-quality merchandise from the NFL."