Ho. Ho. Ho. You think it's funny when Santa's sack is stuffed with a cheapo Barbie doll and a Tank watch without the Cartier label? Or Guess jeans with the label off-register? Laugh again. The Barbie may be flammable, the Tank won't keep time and the jeans might cause cancer.
They're knockoffs. Or counterfeits.
If Jack Fox has anything to do with it, they won't be on the streets. He's a counter-counterfeiter. A knockoff naysayer.
As an executive of the Mattel Inc. toy company in Los Angeles, he says, he "watched toy after toy soar in popularity and sales. Then, suddenly, for no apparent reason, sales would plummet.
"No apparent reason," he says, "meant counterfeits and knockoffs." (A counterfeit is a look-alike that includes a facsimile of the label or trademark. A knockoff is just a look-alike.)
In September, Fox left Mattel to form his own company: Commercial Counterfeiting Control. And in only a few weeks, with some major clients like Mattel, Cartier and Stadium Manufacturing (which includes Michael Jackson items), Fox has become control center of an international web of detection that, within its sphere, seems destined to become the Interpol of trademark protection.
From his cluttered (but high-tech) office in the Sherman Oaks area of Los Angeles, Fox can deal one minute with a suspicious grandmother on K Street in Washington and the next with an ex-customs inspector in San Francisco who is about to finger an incoming shipment of counterfeit Guess sportswear.
The K Street grandmother is a bounty hunter. She may work part time as a retail merchandiser or she may belong to a charitable organization Fox has recruited to help spot phonies. Under an arrangement with Fox, she notifies him (on his toll-free line) when she finds something out of sync. The labels and products of his clients are described in a periodic flier Fox prepares and distributes. The bounty -- from $50 to $100 -- may be paid to an individual or as a contribution to an organization.
There are about 350 of these spotter-shoppers, says Fox, in major cities throughout the country. On the next level are private detectives -- often ex-policemen or retired FBI agents. After a spotter pinpoints a suspicious product, the detectives are the ones who go buy it, and submit an affidavit saying where, when, from whom it is purchased and for how much.
With this in hand, Fox and the specific client may go to local authorities for an injunction or a seizure. Laws are becoming stricter and may carry fines of $250,000 or even jail terms, says Fox. When retailers are involved, he prefers to offer them a deal -- the source of the product in exchange for no prosecution. "So far," he says dryly, "nobody wants to go to jail."
Fox is 55 years old, an ex-journalist, ex-TV executive, ex-toy maven.
He was born in Brooklyn, studied journalism at New York University and spent about a dozen years as an investigative reporter on the old New York Post, and another 10 years with CBS News.
He decided to move to California with his wife and two children in the mid-1960s. "It was after a terrible snowstorm. I was living at 89th Street and First Avenue in Manhattan and I had to spend an hour digging out my car. Then when I got it dug, it turns out not to be my car. Stupido! I swear to myself I'll never do that again.
"It's raining here now," he says in a long phone interview the other day, "but at least I don't have to shovel it."
But it was his work on the New York Post that accounted for what he calls his "finest hour . . . my greatest investigative coup, my service to the republic."
That was his discovery and documentation in the early 1950s of the preferential treatment of an Army private at Fort Dix, N.J. "I got wind of the fact he was getting incredible treatment in his training battalion. People were shining his shoes and cleaning his rifle for him, things like that." The private had worked for a U.S. senator before he'd been drafted, and the senator's influence was being felt. Fox wrote the story and became the catalyst for ending what many consider one of this country's most shameful periods.
The private was G. David Schine. The senator was Joseph R. McCarthy. Fox's investigation triggered the Army-McCarthy hearings, which resulted in the censure of McCarthy.
Later, Fox became the CBS News Mafia expert, including the period when the Valachi papers were in the headlines.
The work he's in now, he concedes, is not all that different from the work he was in then.
And Jack Fox loves his work. His enthusiasm spills into his eagerness to talk about how he does it and why. There is, he says, "more than just lost business" to his new organization.
Dyes for fabrics in counterfeit or knockoff jeans "may be carcinogenic. Many people wear their jeans pretty tight and you have all that stuff rubbing on the skin.
"The people who make these fake things are literally fly-by-nights and pay no attention to the safety involved. Eyes in dolls are not supposed to be put in with pins, the materials should not be toxic or flammable. They not only use cheaper materials, but they have no testing laboratories . . ."
Sometimes the counterfeits are even more sinister. Inferior brake linings in cars, for one. Even worse, says Fox, he'd heard recently of a batch of counterfeit electronic tubes that had found their way into the navigational system of a major airline. "And there is some suggestion that the two satellites that went off orbit are being investigated for counterfeit microchips. The government itself has estimated in its own statements that 2 percent of what they buy is counterfeit."
The monetary loss is also enormous -- "about $18 billion a year," says Fox. "Eighteen, with a B, billion, along with an estimated loss of up to three quarters of a million jobs."
After the retailers tell Fox and his people where the counterfeit goods came from, the network moves to the wholesaler and then to the jobber and the shipper and finally overseas.
"About 90 percent comes from the Far East," says Fox -- "Taiwan, Hong Kong, Singapore, South Korea, Macao . . ." Fox's overseas agents, again often former law enforcement people, can track the goods back to their factories of origin -- although "some things like stuffed dolls are cottage industries, harder to track down. But plastics need special equipment."
Fox then follows this procedure:
"Once we find these people we let them go ahead and manufacture the stuff -- it costs them money. Then we let them package it -- that costs more money. Then we let them ship it -- even more money.
"And then we're waiting for them at Customs.
"That's where we kneecap 'em."
Fox believes he is the only business "dedicated exclusively" to battling the counterfeiting business. "Others do divorces and plant security and counterfeiting on the side. We're dedicated." He owes a great deal, he says, to the U.S. Customs people -- "absolutely fantastic. Understaffed, underfunded, but you give them any lead and they move."
Sometimes the counterfeits are hard to spot.
Sometimes they're a snap.
This year's favorite, says Fox, was a shipment of counterfeit Michael Jackson watches from Taiwan. "It was a pretty good Michael Jackson likeness on the face of the watch," says Fox, "only nobody remembered to tell the counterfeiters he was black."