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Flea Market Raid: Homeland Security Cracks Down On Counterfeit Goods

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Could this be the end of the local flea market?

In an effort to crack down on counterfeiting, the Department of Homeland Security has begun targeting flea markets across the country in a series of high-profile raids that's led to the seizure of millions of dollars worth of merchandise.

The latest example is a recent raid in southwest Baltimore at Patapsco Flea Market, a 300,000 square foot space where 250 small vendors hawk goods and oddities — everything from live crabs to jewelry to clothing. Only open on Saturdays and Sundays, the marketplace was shut down this past Sunday after a two and a half year investigation by the Department of Homeland Security, which found that the market was selling counterfeit merchandise, The Baltimore Sun reported.

Federal agents discovered that nearly 70 percent of the brand name items at the store were allegedly fake and being sold as Nike, Polo, North Face, Louis Vuitton, Gucci and other brands. Confiscated items included 8,911 counterfeit DVDs worth $122,210; 10,699 counterfeit CDs worth $128,000; and 1,728 counterfeit items, including handbags, NFL merchandise and sneakers worth $648,000, according to the International Business Times.

“ICE Homeland Security Investigations (HSI) special agents are executing a federal search warrant at the Patapsco Flea Market as part of an ongoing criminal investigation,” said a U.S. Immigration and Customs Enforcement statement provided by spokeswoman Nicole Navas. “HSI special agents, with assistance from our law enforcement and industry partners, are seizing what is believed to be counterfeit, pirated and unlicensed merchandise that was being sold at the flea market. In order not to compromise this ongoing enforcement action, no additional information can be disclosed at this time.”

It appears that Homeland Security is putting more pressure on flea markets to ensure that their products are legitimate, evidenced by another high-profile raid that resulted in the seizure of 21,308 items worth an estimated $900,000 at an El Paso, Texas, flea market just a few days prior. Counterfeit media and merchandise has proliferated online, but as the raids indicate, remain a significant and potentially growing problem on the ground as well. The Washington-based International AntiCounterfeiting Coalition values the global trade in illegitimate goods at $600 billion a year, rising from $5.5 billion three decades ago, The Sun reported.

Since its inception in June 2010, Operation In Our Sites (IOS) has resulted in the seizure of 758 domain names, 11 criminal arrests and the seizure of over $1.3 million, according to data provided by Navas. Launched by Immigration and Customs Enforcement in conjunction with Homeland Security Investigations, the initiative has found that 705 of these domains offered tangible merchandise, and 53 offered intangible media products via downloads or streaming.

Benefitting from a $43.2 billion increase in its 2012 budget, as reported by The Washington Post, Homeland Security now has even more funding to conduct elaborate stings on counterfeiters. Apart from raids in 1996, 2004 and 2006 for similar offenses at Patapsco, undercover agents even rented out small booths at the market in April and May 2011 to scout the premises, The Sun reported. Much of the sale of counterfeit goods is handled in cash, allowing the business to avoid taxes. The affidavit reveals that cash deposits at Patapsco were often mixed with money from the Patapsco Bingo Hall, a building across the parking lot. The affidavit also says that both spaces "appear" to be owned by the Brzuchalski family, who could not be reached for comment.

Questions remain what the raids might mean for small, legitimate retailers at flea markets like Patapsco, who use the venues as means to earn a living — and how many more the government may have planned.

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