Last year, a coalition of US government agencies and private companies came together in response to a large, nationwide counterfeiting scheme that generated over 100 million dollars in illegal sales. Cisco and Amazon partnered on a criminal referral to the US Department of Justice on their ongoing case, which led to a criminal conviction. Due to these combined efforts, the counterfeiter was sentenced to six and a half years in prison and has agreed to forfeit a total of $100 million in restitution.
The promise and potential of collaborative success stories like these that extend across the public and private sector is why I am here today.
My name is Kebharu Smith, and I am the Associate General Counsel and Director of the Counterfeit Crimes Unit or CCU, at Amazon. I would like to thank Interpol, UL, the Government of Curacao, and the Curinde Free Trade Zone for hosting this year’s conference and for giving me the opportunity to speak with you today. I am both excited and humbled to be here alongside so many friends, industry leaders, and law enforcement and brand partners to talk about a topic that is incredibly important to me: how we can work together in the fight against counterfeits and reduce the harm of the scourge of counterfeits.
Having worked for 19 years as a prosecutor with several of those years specializing in intellectual property and cybercrime, I can tell you that counterfeiting remains a massive problem affecting the retail-industry worldwide. In 2019, the OECD estimated that pirated and counterfeit products made up around 2.5 percent of world trade—that’s $464 billion a year, or roughly the gross domestic product of Belgium.
Counterfeiting undermines the hard work of innovators and creators and drains financial resources from governments and the public. Worse, counterfeiters are sometimes involved with organized crime groups and commit other serious offenses like mail and wire fraud, money laundering, human trafficking, forced labor, and even terrorist financing. We applaud law enforcement and prosecutors’ examination and consideration of other criminal offenses which may be associated with counterfeit goods.
To address these threats head-on, in 2020 Amazon launched the Counterfeit Crimes Unit to work with law enforcement and help hold counterfeiters accountable through the courts. This global team with members from Seattle to Washington DC, to Madrid, London, Milan, and Shanghai is made up of former federal prosecutors, including myself, IP lawyers, former US federal agents, U.K. Metropolitan Police Service officers, experienced corporate investigators and data analysts. CCU compliments Amazon’s decades-long commitment to stand as the safest and most reliable store for our customers. We also partner with our team of over 15,000 within Amazon who are working behind the scenes to keep our store safe from fraud and abuse. Together, we pursue targets around the globe and support law enforcement efforts by providing fact patterns and important suspect data to law enforcement organizations, like ones that many of you are a part of, to bring justice to those attempting to infringe upon brands’ trademarks and sell counterfeits in our store.
In 2023, Amazon identified, seized, and appropriately disposed of more than 7 million counterfeit products worldwide, preventing them from harming customers or being resold elsewhere in the retail supply chain. Our mission is to pursue bad actors, not just to protect Amazon customers but all consumers broadly. That’s what our work has been able to do in partnership with law enforcement all over the globe from the United States to United Kingdom to China.
For example, our collaborations with the luxury brand Ferragamo and Chinese law enforcement led to an investigation of a counterfeiter operating in a warehouse in Yiwu City. Following their investigation, officials raided the criminal’s warehouse seizing hundreds of counterfeit belts and buckle accessories that may otherwise have been sold through retail channels around the world. We also worked with the British Phonographic Industry and the City of London’s Police IP Crime Unit, to identify bad actors who were selling fake CDs. This sharing of information and resources allowed law enforcement to seize nearly £170K worth of counterfeit CDs in a subsequent raid.
To that end, I’d like to give you an inside look on what we do and how we work with our partners to stop counterfeiters.
As reflected in this video depicting the raid action in Southern California, when working with our partners, the support that we offer is end-to-end, from initial referrals to onsite support for investigations and raids with law enforcement, to the ability to provide expertise and live testimony at trial and sentencing.
Based on what we have learned from working with law enforcement to fight counterfeiters, we believe there are three key areas where increased collaboration will help us all to gain ground against counterfeiters:
1. First, by improving information sharing on global counterfeiting activities to help stop counterfeits at the border.
2. Second, by sharing more information about counterfeits and counterfeiters throughout the private sectors.
3. And third, by increasing private sector support of law enforcement efforts and resources to bring these bad actors to justice.
Let’s start by improving how the public and private sectors share information to stop counterfeit goods before they reach their destination. This approach will help customs and law enforcement detect, search, and seize these items more effectively, and also strengthen their ability to take down the criminal networks behind them. For example, onsite raid support to law enforcement would allow information recovered by law enforcement to be quickly analyzed by Amazon’s CCU and lawfully shared back to law enforcement so that they may expand their cases.
We have seen other successes in this area. We have formal information-sharing partnerships with customs and law enforcement agencies in the United States and Japan. In fact, our partnership with Japan stopped more than 100,000 counterfeits in 2023 from reaching supply chains that extend beyond Amazon. Further, since 2020, in addition to our full investigative referrals that we regularly provide law enforcement, CCU has proactively shared data of identified counterfeiters through our Quarterly Counterfeit List with key law enforcement partners across the globe. Depending on the jurisdiction, this list includes key data such as suspect commodities, addresses, phone numbers, affected brands, and other useful data points, which are thoughtfully and lawfully shared to support law enforcement partners. These partners include EUROPOL, US Homeland Security Investigations, FBI, US Customs and Border Protection, and Spanish, Italian, and Chinese law enforcement.
But this is just the beginning. We need to do more, together. The private sector must continue to partner with customs and law enforcement agencies not only to stop and seize shipments, but also to help freeze other assets and counterfeit inventory that retailers may know about while in transit.
We are invested in building public-private-information-sharing partnerships that support customs agency’s ability to regularly inform fulfillment networks when the agency identifies non-compliant shipments bound for that fulfillment network. We realize that, in certain countries, we need the support of policymakers to remove obstacles that would prevent this crucial flow of information, which is essential to effective interdiction, disruption, and prosecution. This would allow the fulfillment network to take action on additional counterfeits and provide greater information and assistance to law enforcement. Amazon also supports marketplace and logistics service providers sharing information on counterfeiting activity with customs agencies to improve detection, seizures, and dismantling of criminal networks behind these illegal goods.
Next, while our investments to stop counterfeiters are paying off in our store, we know that counterfeiters are determined to move their product and will pivot, commit their fraud across borders, and try to sell their illegal products elsewhere, including their own websites, online marketplaces, and otherwise offline channels.
This is why private sector collaboration is so important. We believe that the private sector needs to lead the way in creating scalable solutions for real-time information sharing on confirmed counterfeiters that actively stops these fraudsters from migrating from store to store. These partnerships improve visibility on our efforts, which can deter counterfeiters and support the spread of industry best practices, and allow stores to alert one another and take action before counterfeiters have the ability to jump from one retailer to another. We have encouraged this data sharing to help the entire industry get better and create a safer, more trustworthy future for consumers everywhere.
We know these information sharing paths are not easy to build, but they are essential to stopping counterfeiters who turn to alternative channels when their target has successfully shut down some of their revenue opportunities. Amazon will continue to support private-sector information sharing partnerships that help all retailers take faster, more effective actions against the counterfeiters that threaten our stores and customers. Ultimately, stronger collaborations that involve broader data sharing with entities like banks, logistics companies, and other stakeholders are needed. We encourage those in the private sector to join us in building these partnerships to help deliver results that benefit consumers and brand owners all across the globe.
We are proud of the work we have done together to combat these criminals and will continue to share information regarding confirmed counterfeiters blocked from selling in our store. We will continue to provide authorities with high-quality criminal referrals and evidence to enhance their ability to hold counterfeiters accountable and go further in dismantling their supporting criminal networks. Yet, as a former career prosecutor, I’m uniquely aware of the real-world impact of resource limitations and the need to prioritize investigative and prosecutorial efforts across a wide range of crime types.
It is an honest reality that prosecuting counterfeiters has not been sufficiently prioritized to receive the needed level of resourcing and attention to more effectively bring these criminals to justice. We believe that public-private sector collaborations should focus on closing resource gaps that would otherwise inhibit the investigation and prosecution of counterfeiters and their networks. Specifically, the private sector should support calls to increase government funding for law enforcement anti-counterfeiting and anti-illicit trade activities. We must also do more to support and enhance intellectual property crimes training and education, like the International IP Crime Investigators College, as well as efforts to modernize counterfeiting investigations and prosecution units. This will help to put more counterfeiters out of business, secure the global supply chain and retail industry, and, importantly, it will help address other illicit activities that can be tied back to counterfeiting networks or those that are funded by counterfeiting activities.
I want us all to take a moment to reflect on the key truth that must continue to define our future work together: the threat of product counterfeiting requires a global and collaborative solution.
We recognize that the fight against counterfeiting would be overwhelming for one individual or one organization. We’ve all witnessed how our shared knowledge and collaborative spirit can transform isolated efforts into dynamic, interconnected networks. Our continued success depends on our ability to work closely across retailers, industry leaders, brands, academia, associations, policymakers, law enforcement and, customs agencies, governments, and non-profits. What’s more, we must apply that approach to other bad actor ecosystems designed to commit other types of fraud and abuse, such as fake review schemes, impersonation scams, and more to continue to make a global impact for consumers all over the world.
In closing, let’s seize this opportunity to build on our progress to date.
Together, we will not only combat counterfeit goods, but also set new standards for integrity and excellence in our industry and make a lasting impact to protect consumers.