How Counterfeit Rolexes Actually Work | How Crime Works | Insider

Summary

Private investigator Rob Holmes details his fight against counterfeit watches, a $23.3 million industry linked to criminal activities like child labor and human trafficking. Holmes goes undercover as a distributor to expose the high-quality replicas that flood the US market, often from Chinese factories using cheap labor and stolen software. He explains the tactics used by counterfeiters to appear legitimate and the challenges faced by authorities in curbing this trade. Holmes also shares his family's history in combating counterfeits, including his father's dangerous encounters with criminal gangs, and his own experiences since starting his company in 2001.

Takeaways

• 🕵️‍♂️ Rob Holmes is a private investigator who has prevented millions of dollars worth of counterfeit watches from entering the US market.
• 🔢 An estimated 23.3 million counterfeit watches are currently in circulation in the US, with ties to serious issues like child labor, sweatshops, and human trafficking.
• 🎭 Holmes works undercover as a distributor to be credible and faces fear due to the dangerous nature of his job.
• 🔍 Counterfeit watches have become nearly indistinguishable from the real ones, often coming with boxes and authentication certificates.
• 🏭 Chinese factories are highly skilled in manufacturing counterfeits, using the same machines and stolen software as the real companies.
• 📦 Counterfeit watches are shipped in creative ways, often disguised within other products to avoid detection.
• 🛃 US Customs struggles to inspect the vast number of packages, making it difficult to stop the influx of counterfeit goods.
• 💰 The high-profit margins in counterfeit sales make it worthwhile for distributors to replace any goods stopped at Customs.
• 🛍️ The demand for counterfeits remains consistent, driven by consumers seeking bargains and the thrill of getting something over on the system.
• 🔄 The gray market exists where legitimate products are sold at a discount outside of the original supply chain, but can also be mixed with counterfeits.
• 👥 Holmes advises going to authorized dealers for purchases or repairs to avoid falling victim to counterfeits and the shady practices that can occur in the secondhand market.

Q & A

What is Rob Holmes' profession?

Rob Holmes is a private investigator specializing in stopping counterfeit watches from entering the US market.

How many counterfeit watches are estimated to be circulating in the US according to the transcript?

It is estimated that 23.3 million counterfeit watches are circulating in the US right now.

What negative societal impacts have been associated with the counterfeit-watch industry?

The counterfeit-watch industry has been tied to child labor, sweatshops, and even human trafficking.

What challenges does Rob Holmes face when working undercover as a distributor?

When working undercover, Rob Holmes has to be very credible and deal with a bit of fear due to the dangerous nature of the counterfeit industry.

How have counterfeit watches improved in quality over time?

Manufacturing of counterfeit watches has improved to the point where even cheaper knockoffs have all the trademarks and come with a box and authentication certificates, making them near clones of the original.

What is the main way to differentiate a genuine Rolex from a counterfeit according to Rob?

The main way to differentiate a genuine Rolex from a counterfeit is by opening up the watch and looking at the movement, as a Swiss movement made by Rolex is unmistakable.

How does the counterfeit manufacturing industry replicate the real-world manufacturing?

The counterfeit manufacturing industry replicates real-world manufacturing by setting up in places where manufacturing is cheap, using the same machines and software as the real companies, often obtained through industrial espionage.

What is the role of QC in the counterfeit watch business?

QC, or quality control, in the counterfeit watch business involves sending high-resolution photos of the item and the shipping label to the buyer for verification before shipping the product.

How do counterfeit distributors bypass US Customs inspections?

Counterfeit distributors bypass US Customs inspections by shipping items individually or in small quantities mixed with other goods, making it difficult for Customs to inspect every package. They also rely on the high volume of mail and the inefficiency of inspections.

What is the gray market and how does it relate to counterfeit watches?

The gray market is where products are sold outside of the original supply chain, often at a discounted price. While some products are legitimate, there is a risk of buying counterfeit or 'epic fakes' through the gray market, especially when mixed with genuine products.

What advice does Rob Holmes give to consumers regarding the purchase and repair of luxury watches?

Rob Holmes advises consumers to always go to an authorized dealer for the purchase or repair of luxury watches to avoid the risk of buying counterfeit products or falling victim to shady repair practices.

How did Rob Holmes' father contribute to the fight against counterfeit watches?

Rob Holmes' father was involved in catching counterfeit watch sellers on Canal Street in the 1980s and 1990s. He conducted raids, made undercover buys, and worked with law enforcement to combat the counterfeit industry.

What personal risk did Rob Holmes' father face in his fight against counterfeit watches?

Rob Holmes' father faced significant personal risk, including a $200,000 bounty put on his head by the Born to Kill gang, which led to the need for heightened security measures and constant vigilance.

What is the significance of the Anti-Counterfeiting Act of 1984?

The Anti-Counterfeiting Act of 1984 is significant because it created penalties for counterfeiting trademark goods, strengthening the laws against this form of financial crime.

How does Rob Holmes differentiate between various levels of counterfeit watches?

Rob Holmes differentiates between various levels of counterfeit watches by their quality and price. Replicas are near-perfect lookalikes with the trademarks of the actual product, mid-level counterfeits are priced between $300 to $500, and anything under $300 is referred to as 's---ters'.

What methods does Rob Holmes use to ensure his undercover identities are not traced back to him?

Rob Holmes uses every counterintelligence method imaginable to ensure his undercover identities are not traced back to him, allowing him to conduct multiple undercover buys without raising suspicion.

How can consumers identify a counterfeit watch?

Consumers can identify a counterfeit watch by using a magnifying glass to inspect details on the watch face for imperfections, checking the quality of the craftsmanship, the accuracy of the cyclops magnifier over the date, and the presence of a registered trademark and serial numbers.