State Cracks Down on Counterfeit Goods

An underground network of smugglers and counterfeit goods is accused of costing California billions of dollars every year, but now the state is fighting back.

The Board of Equalization, the Franchise Tax Board, and the Employment Development Department have teamed up to create the Central Intelligence Partnership. The goal is to dismantle the criminal organizations and individuals who smuggle counterfeit goods into the state.

It's a multi-billion dollar industry that's costing California $8 billion each year in uncollected taxes, money that could be spent on schools, public safety, hospitals, and other essential services, officials said.

"That affects us directly by the loss of 67,000 police officer jobs that we could be creating, somewhere around 76,000 firefighters, 87,000 teachers that we could be creating, so you see the importance of us getting this under control," said Jerome E. Horton, Board of Equalization chairman.

At a news conference at the Port of Los Angeles on Tuesday, authorities showed off several tables of fake designer handbags, shoes and jewelry.

Every year, more than 14 million containers make their way to the Port of LA, but only one percent of those containers are screened, officials said.

"You have a loved one, you want to present them with a gift, how many of us would knowingly hand them a box of lead? Well think of that when you look at that jewelry there at the table," said LA Port Police Chief Ronald Boyd.

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During the past three years, the LA County Sheriff's Department's counterfeit unit has served 100 search warrants, arrested 200 suspects, and seized more than $300 million in products, officials said.

At the news conference Tuesday, consumers were urged to not purchasing counterfeit items, and instead report those items to authorities.