International crime networks are doing a big business in stolen and counterfeit high-technology items such as home computers and video games, and some counterfeits are unsafe, witnesses told a congressional panel yesterday.
"The trade in stolen electronic merchandise is both extensive and lucrative," one private investigator testified at a hearing of the House Energy and Commerce subcommittee on oversight and investigations.
The subcommittee is studying the impact of illegal and unfair foreign trade practices on interstate commerce.
James Bikoff, president of the International Anticounterfeiting Coalition, which claims 140 corporate members, also was a witness. He displayed a table full of counterfeited items, alongside the originals, including Levi jeans, watches, credit cards, "E.T." dolls, Mickey Mouse storybooks, packages of Vaseline and other medicines, and numerous auto parts.
Counterfeit automotive parts and accessories are being sold abroad and in the United States, and "even the most conscientious mechanic" cannot tell the difference between the real and the fake, said Linda Hoffman, representing the Automotive Parts and Accessories Association.
When the counterfeited item "is a spark plug, fake oil or gas filter, or a bogus electronic generator, it is generally a matter of poor performance that may lead to costly repairs," Hoffman said. But when the fakes are "brakes that fail to meet minimum load standards, gas caps that lack safety valves, inferior power steering belts, or turn signals that do not always work, the consumer, as well as others on the road, are placed in serious danger."
"Inferior agricultural chemicals, bearing counterfeit trademarks of Chevron . . . virtually destroyed the 1979 Kenyan coffee crop," Bikoff said. "A few years earlier, a fatal helicopter crash in Caifornia was traced to a counterfeit replacement part, and the problem has spread to medical devices such as pacemakers and even to the space program."
Although he said he could provide no overall precise figure, Bikoff said his group estimated that "the total value of counterfeit goods sold in the U.S. now is in the billions annually and is increasing every year."
Developing countries such as Brazil, Colombia, Equador, Indonesia, Korea, Mexico, Panama, the Philippines, Taiwan and Thailand are the principal sources of the faked products, Bikoff said.
He said that no federal statute adequately covers commercial counterfeiting, and he supported legislation providing criminal sanctions for any manufacturer, distributor or retailer who intentionally produces or sells counterfeit products.