Rekubit Exchange:New York authorities make 'largest-ever seizure' of counterfeit goods worth more than $1B

Two people have Rekubit Exchangebeen arrested after raids on storage facilities in New York City uncovered hordes of counterfeit goods and other luxury products with an estimated retail value of more than a billion dollars, according to federal authorities.

Adama Sow, 38, and Abdulai Jalloh, 48, were arrested Wednesday morning and were each charged with trafficking counterfeit goods, the U.S. Attorney’s Office for the Southern District of New York said in a news release. The two men are accused of running counterfeit goods trafficking operations since at least January.

“As alleged, the defendants used a Manhattan storage facility as a distribution center for massive amounts of knock-off designer goods," U.S. Attorney Damian Williams said in a statement Wednesday. "The seizures announced today consist of merchandise with over a billion dollars in estimated retail value, the largest-ever seizure of counterfeit goods in U.S. history."

Sow and Jalloh could face up to 10 years in prison if convicted, according to authorities. Photographs released by prosecutors showed countless of boxes stacked in one location, and numerous wallets and handbags stacked or hanging from hooks from the floor to the ceiling at other storage units.

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About 219,000 counterfeit items seized

From at least January to Oct. 20, Sow and Jalloh allegedly ran "large-scale" counterfeit goods trafficking operations out of a storage facility in Manhattan, according to indictments. Jalloh is also accused of distributing counterfeit goods out of an offsite location in Manhattan.

About 219,000 counterfeit bags, clothes, shoes, and other luxury merchandise at these storage facilities were seized by authorities, the attorney’s office said.

Searches of premises controlled by Sow revealed over 83,000 counterfeit items with an estimated retail price of over $502 million. And over 50,000 counterfeit items found at premises controlled by Jalloh were estimated at over $237 million.

The prices were based on the manufacturer’s suggested retail price for the real versions of the seized counterfeit merchandise. Federal authorities said the actual street value of the items seized is likely under $1 billion.

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Counterfeit luxury goods in the United States

Counterfeit luxury goods have long been a staple of the underground shopping experience and now, the online shopping experience.

In recent decades, law enforcement officials and investigators that work with luxury brands have aggressively cracked down on counterfeit operations. Authorities have targeted retailers, importers and distribution centers.

In New York City, the famous Canal Street has attracted shoppers who seek inexpensive knockoffs — which can cost hundreds or thousands less — that look identical to popular or designer merchandise. But New York police have conducted massive busts of vendors and hundreds of counterfeit items worth millions have been confiscated in recent months.

"The trafficking of counterfeit goods is anything but a victimless crime because it harms legitimate businesses, governments, and consumers," New York Police Department Commissioner Edward Caban said in a statement Wednesday.

With the rise of online shopping, federal authorities have also warned that counterfeit goods trafficked to American consumers through e-commerce platforms and online third-party marketplaces threaten public health and safety.

"Counterfeit versions of popular brands are regularly sold in online marketplaces and flea markets," according to the U.S. Customs and Border Protection. "Not only are counterfeit goods produced in unregulated and potentially exploitative environments in foreign countries, but the profits from their sales provide a funding stream to organized crime."

According to CBP data, handbags, wallets, apparel, jewelry and consumer electronics are at a higher risk of being counterfeited. During the 2022 fiscal year, CBP seized over 24.5 million shipments of counterfeit and pirated goods nationwide.

Contributing: The Associated Press