INDIANAPOLIS - Counterfeit bags and purses are a growing problem in Indiana and people with knockoff bags could soon find themselves in trouble with authorities, officials say.
The Call 6 Investigators found that what Hoosiers are doing online, including on Facebook, could land them in jail or wind up costing them a fortune.
More people are turning to Facebook online yard sales to unload knockoff bags that look like brand-name purses from Chanel, Coach and Louis Vuitton.
"If you can't buy the real ones, you might as well buy the cheaper ones," said Ashley Canan, who buys her bags from the Coach Outlet but has no problem with knockoffs.
"It'd be nice to have a real one, but they're real expensive," said Torri Goble, of Indianapolis.
The U.S. Attorney's Office said it's not illegal to buy or possess a counterfeit bag, but many people think they can legally sell it, as long as they disclose that it's fake.
"It's absolutely not a defense if you tell the individual, 'Hey, this isn't real,' or, 'Hey, this is a knockoff,'" said Brad Shepard, assistant U.S. attorney. "You're taking a risk."
"Selling counterfeit items is illegal, and you could go to jail," said Gary Woolf, resident agent in charge of Indianapolis' Homeland Security Investigations, the federal agency that investigates counterfeit bags. "It's not a victimless crime because it hurts the American economy and costs American jobs. It hurts legitimate companies."
Woolf said HSI is seizing knockoffs from storefronts all over the country and is monitoring websites such as eBay and Facebook for online transactions.
"That person you're selling to could be an undercover officer or undercover federal agent. You never know," said Woolf. "We've shut down numerous websites. There's no distinction selling out of your car or online."
The Call 6 Investigators took hidden cameras into area flea markets and discount shops and had no problem buying bags with designer-looking labels for as little as $1.
Call 6 Investigator Kara Kenney asked store workers, and most weren't sure if a bag was real or fake.
"I don't know. I'm sorry. I wouldn't know if it was," said one worker at a flea market, where Kenney purchased a bag that appeared to be Louis Vuitton.
Other store workers gave puzzling responses.
"It's not the exact one, but it's the real brand name, same kind like this, that is Louis Vuitton," said a worker at another flea market.
Purse manufacturers would not tell Call 6 how to distinguish by looking at a bag whether it is real or counterfeit, because they don't want counterfeiters to have that information.
"Louis Vuitton products are only sold in Louis Vuitton stores, or through the Louis Vuitton website. The only way for consumers to ensure that a product is authentic is to purchase it from Louis Vuitton," wrote Katie Greer, spokeswoman for Louis Vuitton, in an email to RTV6.
The Call 6 Investigators showed the hidden camera footage to Woolf.
"Some of it looks pretty blatant," he said. "We do have plans, so people should be careful."
Woolf also inspected bags the Call 6 Investigators purchased and said some of them look like knockoffs, but counterfeiters are getting better at disguising fakes.
"This one doesn't really zip very well," said Woolf, examining a bag with a "Coach" label RTV6 bought at a flea market. "That's not quality. If it looks too good to be true, it probably is."
"The quality of the counterfeiters is improving," said U.S. Attorney Joe Hogsett.
Woolf said investigators rely on experts and purse manufacturers to certify the bags are counterfeit.
Some purse companies are taking on counterfeiters in the courtroom.
As part of "Operation Turnlock," Coach has filed 650 civil lawsuits in the last 3 ½ years against people selling counterfeit Coach bags, including at least 17 lawsuits filed in Indiana.
"In these lawsuits, Coach has sought the maximum legal and equitable remedies available and has successfully forced defendants to pay millions of dollars in damages," said Nancy Axilrod, vice president and deputy general counsel for Coach. "Operation Turnlock is specifically designed to target all possible participants in the counterfeit distribution chain, including manufacturers, importers, customs brokers, wholesale operations, retail businesses, internet websites, private purse party operators and street vendors."
Full statement from Coach
Purse manufacturers monitor websites such as eBay and Facebook, as well as consignment shops.
Betty Daniels, owner of the Designer Consigner on Indianapolis' south side, received a cease and desist letter from Coach’s attorney in 2010 after she unknowingly sold knockoff sandals to an undercover Coach buyer.
"I was terrified," said Daniels, who said she had no idea the sandals weren't authentic.
Daniels now takes several steps to make sure what she's selling is real, including inspecting the bag, checking with manufacturers, and having consigners sign a waiver guaranteeing the purse is real.
"We’re doing everything we can to sell a bag that someone has guaranteed is authentic," said Daniels. "It shows we're trying to put our best foot forward and sell nothing but authentic bags."
Daniels is making it her mission to educate people that counterfeit laws apply, even on Facebook online yard sales.
"I was amazed at how many people said, 'No, this is OK. I can do this,'” said Daniels. "They say, ‘I'm selling a fake and I'm telling everyone it's a fake. So, I'm not trying to be deceiving.'"
The penalty for selling counterfeits is up to 10 years in prison and a $2 million fine, according to the U.S. Attorney’s office, which has prosecuted two Indiana cases so far in 2013.
Former Lafayette Square Mall store worker Mamadou Diallo is awaiting sentencing after pleading guilty to trafficking counterfeit purses.
"You may not get a knock on the door from the police, but you may get a letter from the designer," said Daniels.
The bottom line is, buying or having a knock off is perfectly legal, but don't sell it without certainty that the bag is real.
The shops in the hidden camera video later told Kenney they were not intentionally breaking the law and were taking steps to verify whether the bags were real.
One flea market told RTV6 it was unaware it was illegal to sell counterfeit bags.
Purse manufacturers maintain the only way to tell for sure a bag is real is to buy it from an approved store.
"We also wish to let consumers know that Coach does NOT offer its merchandise for sale through individual street vendors, unauthorized retail locations, internet auctions or private house parties," said Axilrod. "The only way to ensure the authenticity of your Coach products is to make your purchases exclusively at: 1) Coach Stores; 2) Coach Factory Stores; 3) www.coach.com; and 4) authorized retailers (which can be found under the “Store Locator” link on www.coach.com).”
Axilrod said Coach is asking the public to assist in cracking down on the illegal counterfeit activities by calling 1-877-7TURNLOCK or emailing firstname.lastname@example.org with any information concerning counterfeit Coach merchandise.
Coach counterfeit information -- http://www.coach.com/online/handbags/genWCM-10551-10051-en-/Coach_US/CompanyInformation/InvestorRelations/ReportingCoachCounterfeits
Kate Spade counterfeit information -- https://www.katespade.com/Counterfeit-Merchandise-Warning/counterfeit-merchandise,en_US,pg.html
Association of retail professionals --http://www.narts.org/i4a/pages/index.cfm?pageid=3313