TASK FORCE: STOP THIEF!
Byline: Jennifer Owens
WASHINGTON — Led by Calvin Klein Cosmetics, a task force against cargo thieves is targeting Appropriations Committee members in Congress this year to convince them more money is needed to help fight a crime estimated to cost more than $10 billion dollars annually.
Already, the Cargo Theft Task Force, consisting of 17 local, state and federal police officers based in Miami, has received $1.1 million in Congressional aid.
But both law enforcement and beauty industry officials are hoping Congress will turn the regional effort into a national one.
Cargo theft — which often leads to products being sold in illicit outlets — isn’t Calvin Klein’s only criminal concern these days. The company has also joined with Chanel in trying to convince individual states to increase punishments for convicted criminals from misdemeanor levels to felony ones.
On a related front, in July, President Clinton signed the “Anticounterfeiting Consumer Protection Act,” adding racketeering charges to existing federal penalties.
The problem is that criminals like hot products just as much as consumers do — it’s a fact of successful business life, said Alfred T. Checkett, director of corporate security for Calvin Klein Cosmetics.
“Counterfeiting effects us worldwide,” he said. “And cargo crime has been a silent crime for a long time, so it was allowed to fester untouched. There is a kinship to both crimes, and they both equally affect the bottom line.”
While Calvin Klein has usually sold its fragrances to distributors by the time they reach the dock, both counterfeiting and cargo theft concern the company because it does not want its products finding their way onto the gray market of unauthorized parallel imports or illegal secondary markets.
The combination can make distributors reluctant to purchase the goods in the first place. “A responsible corporation is attuned to its image, so they have to protect their trademark and their product,” Checkett said.
Nevertheless, helping companies like Calvin Klein protect trademarks has been of little importance to most courts.
“That’s how it is all over the world,” Checkett said.
Take counterfeiting, estimated by the International Trade Commission to be a $200 billion a year problem.
“Counterfeiting is a crime that the courts leave unattended to because of the priority issue, so it’s almost buyer beware,” noted Checkett.
To protect themselves and their customers, Calvin Klein, Chanel and about 160 other members of the International Anti-Counterfeiting Coalition have been lobbying states to strengthen sentences for convicted counterfeiters.
“We’re batting 1.000,” said the coalition’s president John Bliss, claiming that his group has successfully lobbied California, New York, Florida, North and South Carolina, Georgia, Maryland, Virginia, Pennsylvania, New Jersey, Illinois and Ohio.
Bliss said the coalition’s campaign has resulted in counterfeiters moving their operations from states where the crime is a felony to places where it isn’t.
He said the coalition hopes eventually that its campaign will “raise the barrier to illegal counterfeiting and [criminals] will move onto something else.”
That will be a long time coming, Checkett said. So long, he said, that the fight against both counterfeiting and cargo theft can seem overwhelming at times.
“It seems voluminous … but corrective action needs a first step,” Checkett said. “If we do not correct a virus that exists now, then what is it going to be in the year 2000 when we invite even more trade with the U.S.?”
That’s why Checkett continues to monitor crime investigations involving Calvin Klein fragrance brands worldwide. Most recently, Checkett traveled to Manchester, England, to visit the site of a multimillion-dollar counterfeit fragrance factory discovered last November and considered to be the largest supplier of fake CK One fragrance in the United Kingdom.
The bust resulted in six arrests, which Checkett hopes will turn into even more as counterfeiters cooperate with police. The factory bust was the fourth in nine years for Calvin Klein — which hires its own investigators to help police snuff out counterfeiters.
In addition to CK One, police also found counterfeit bottles of Calvin Klein’s Obsession and Escape, as well as brands manufactured by Estee Lauder, Chanel, Guerlain and Giorgio Beverly Hills.
Checkett said companies essentially have three ways to respond: Do nothing, retain lawyers who will hire outside investigators, or employ an internal intelligence staff. While Checkett obviously supports the latter choice, he also believes that stemming the flow of both counterfeit and stolen products will take much more than individual companies and individual law agencies can provide.
That’s why in addition to encouraging more money for FBI, local police and U.S. Customs investigations, Calvin Klein also has pushed for industry associations — from trucking and shipping to the Cosmetic, Toiletries and Fragrance Association — to become vocally active.
“What we’re looking for is to gain the attention of Congress by way of associations,” Checkett said. “I didn’t want to make it a company issue because it effects all consumers. This is like milk for children. Who can say milk for children is bad? Cargo theft is an issue that we need to correct. It’s a no-brainer.”
It’s also an illegal $10 billion domestic business, according to industry estimates. That’s why in the past year, the Cargo Theft Task Force has pressured U.S. Attorney General Janet Reno to make cargo theft a priority for the Department of Justice.
In recent years, Justice officials have increased the fight against illegal cargo activities, mostly in Miami — home to one of the nation’s largest ports and the gateway to South and Central American trade.
“I’m not saying that we’ve solved the problem or even put a dent in it, but there are a number of initiatives,” said Wilfredo Fernandez, special counsel for the U.S. Attorney’s Office for the Southern District of Florida in Miami.
For example, last March, the FBI nabbed $1.4 million in stolen goods and arrested 75 people when it set up a phony storefront and put out word that it would process stolen goods.
In all, task force efforts have resulted in 110 state arrests and 72 federal indictments. “The problem is that the thefts take so many different forms,” Fernandez said, citing crooked dock security guards, the hijacking of trucks, or the hiding of contraband in legal shipments.
“As many task forces as you can come up with, there are five other ways to steal. It’s almost like sticking a finger in the dike.”
But more and more agencies, companies and associations are joining in the fight against a rising tide of thefts and fake products, he said.
“Calvin Klein Cosmetics has been one of the leaders to get attention to the problem, and they’ve been successful because no one was talking about it before,” Fernandez noted. Meanwhile, the anti-counterfeiting coalition plans to take its lobbying efforts abroad to help strengthen international laws. Executives involved said such coordination is exactly what it’s going to take to fight counterfeiting and cargo theft.
That’s why Checkett said he sees progress now that more law enforcement and industry groups have started working together.
“We’re listening to the same tune,” he said. “Now that tune needs to be fine tuned.”