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.

Outlines

00:00

🕵️‍♂️ The Undercover War on Counterfeit Watches

Rob Holmes, a private investigator, discusses his experiences in combating the influx of counterfeit watches into the US market. He highlights the sophistication of counterfeiters who mimic high-quality brands and the challenges faced due to the sheer volume of fakes. Holmes touches on the connection between the counterfeit industry and serious crimes like child labor and human trafficking. He also explains the evolution of counterfeit watch quality, the difficulty in distinguishing fakes from genuine products without opening the watch, and the global nature of the counterfeit market, with a focus on manufacturing in China.

05:02

📦 The Logistics and Distribution of Counterfeit Goods

This paragraph delves into the logistics of counterfeit watch distribution, from the manufacturing in China to the various methods used to smuggle and sell these products in the US. Holmes talks about the use of tier systems on Chinese marketplaces, the inspection process, and the reality of factories using forced labor. He also describes how counterfeit products are often shipped with legitimate items to avoid suspicion and the challenges faced by US Customs in inspecting the flood of packages. The narrative continues with the gray market, where legitimate products are sold at a discount outside their intended supply chain, and the risks associated with buying from this market.

10:03

🔍 Identifying and Battling Counterfeits in the Watch Industry

Rob Holmes provides insight into his investigative techniques and the methods used to maintain anonymity while conducting undercover operations. He explains the different levels of counterfeit watches, from high-end replicas to low-quality fakes, and the terminology used within the industry. Holmes shares tips on how to spot a counterfeit watch, including examining details with a magnifying glass, the movement of the second hand, and the quality of the cyclops date magnifier. He also discusses the legal framework surrounding counterfeit goods, including the Lanham Act and the Anti-Counterfeiting Act of 1984, and the penalties for trafficking in counterfeit goods.

15:03

🚨 The Dangers and Personal Risks of Enforcing Anti-Counterfeit Laws

Holmes recounts the personal risks and dangers associated with his work, including threats and violence. He shares a story about a time when a gang put a bounty on his father's head, which led to heightened security measures for the family. Despite his initial reluctance, Holmes eventually joined the family business and became deeply involved in combating counterfeit goods. He reflects on the impact of his father's work and the legacy that he and his brother continue to uphold in their own company.

20:04

🤝 Continuing the Legacy: From Bible College to Counterfeit Crusader

In this final paragraph, Holmes narrates his journey from initially rejecting the family business to eventually embracing it. After an unsuccessful attempt at comedy, he found himself conducting raids against counterfeiters in Los Angeles, similar to his father's work in New York. Following his father's passing, Holmes felt the responsibility to carry on the family legacy. He and his brother now work together, with their father's influence ever-present in their efforts to fight counterfeiting.

Keywords

💡Private Investigator

A private investigator is a professional who is hired to undertake investigations, often on behalf of individuals or organizations. In the context of the video, Rob Holmes, the private investigator, is dedicated to stopping the influx of counterfeit watches into the US market. He uses various methods, including undercover work, to identify and combat this illegal trade.

💡Counterfeit Watches

Counterfeit watches refer to unauthorized replicas of branded watches that are made to imitate the original in appearance and details. The video discusses the prevalence of counterfeit watches in the US market, with an estimated 23.3 million in circulation, and the various ways they are produced, distributed, and sold.

💡Organized Crime

Organized crime involves a group of individuals working in a coordinated manner to engage in illegal activities for profit. The script mentions that organized criminals are behind the production of counterfeit watches, indicating the scale and complexity of this illegal industry.

💡Undercover Work

Undercover work entails an investigator operating covertly, often posing as someone else, to infiltrate criminal operations and gather evidence. Rob Holmes describes his experiences working undercover as a distributor to gain credibility and expose the counterfeit watch trade.

💡Quality Control (QC)

Quality control is the process of ensuring that products meet certain standards of quality before they are sold. In the video, Holmes discusses how counterfeit manufacturers have adopted practices like QC, sending high-resolution photos to customers for approval, to give an illusion of legitimacy.

💡Gray Market

The gray market refers to the trading of goods through distribution channels that are unauthorized by the original manufacturer. The script explains that the gray market can be a source of both legitimate and counterfeit products, often sold at a discount, which can deceive consumers into thinking they are getting a deal.

💡Trademarks

Trademarks are symbols, logos, or names that identify and distinguish a company's products or services. Counterfeit watches often use these trademarks to mimic the appearance of genuine products. The video mentions how counterfeiters have improved their manufacturing to include all trademark details on their products.

💡Industrial Espionage

Industrial espionage is the practice of stealing trade secrets or proprietary information from competitors, often for economic gain. The script refers to how counterfeit manufacturers use stolen software, obtained through industrial espionage, to produce their goods.

💡Supply Chain

A supply chain is the network of organizations, people, activities, information, and resources involved in producing and delivering a product or service. The video discusses how counterfeit products are diverted from the original supply chain and sold through unauthorized channels, such as the gray market.

💡Legislation

Legislation refers to the process of making or enacting laws. The script mentions the Lanham Act and the Anti-Counterfeiting Act of 1984, which were enacted to combat counterfeiting and provide penalties for those engaged in the trade of counterfeit goods.

💡Cyclops

In the context of watches, a cyclops is a magnifying lens over the date window, which makes it easier to read. The video script describes how counterfeiters often fail to accurately replicate the cyclops, which can be a telltale sign of a counterfeit watch.

💡Epic Fakes

Epic fakes are counterfeit products that are of such high quality that they are nearly indistinguishable from the genuine article. The term is used in the script to describe counterfeit watches that are so well made that only an expert can tell the difference by examining the watch's movement.

💡Sweatshops

Sweatshops are workplaces characterized by poor working conditions, low wages, and long hours. The script mentions that the counterfeit-watch industry has been linked to sweatshops, suggesting the exploitation of workers in the production of these illegal goods.

💡Human Trafficking

Human trafficking involves the illegal trade of people for exploitation or forced labor. The video script alludes to the connection between the counterfeit-watch industry and human trafficking, indicating the severe social issues associated with this criminal activity.

💡Canal Street

Canal Street in New York was historically known as a hub for counterfeit goods, particularly watches. The script describes how Rob Holmes' father was involved in raids and enforcement actions against counterfeit sellers on Canal Street, highlighting the area's notoriety in the counterfeit trade.

💡Santee Alley

Santee Alley in Los Angeles is compared to Canal Street in New York as another area notorious for counterfeit goods. The script mentions Rob Holmes' experience conducting raids in Santee Alley, drawing parallels to his father's work on the East Coast.

💡Bezel

The bezel of a watch is the ring that surrounds the watch face and冠 is often used for timing functions. The script points out that the bezel is difficult to replicate accurately in counterfeit watches, making it a key detail for identifying fakes.

💡Serial Numbers

Serial numbers are unique identifiers assigned to individual products, often used for authentication and tracking. The video describes how genuine watches have serial numbers that can be found under the band, which counterfeiters may not replicate.

💡Civil Penalties

Civil penalties are financial punishments imposed by a court in a civil lawsuit, as opposed to criminal penalties. The script discusses how individuals caught selling counterfeit goods can face steep civil penalties, including large sums of restitution.

💡Restitution

Restitution is the compensation paid by a wrongdoer to someone who has been harmed. In the context of the video, it refers to the financial compensation that courts may order individuals selling counterfeit goods to pay as a civil penalty.

💡Born to Kill Gang

The Born to Kill gang, mentioned in the script, is an example of the dangerous criminal elements that can be involved in the counterfeit trade. The gang's threat against Rob Holmes' father illustrates the risks faced by those combating counterfeiting.

Highlights

Rob Holmes is a private investigator who has prevented millions of dollars of counterfeit watches from entering the US market.

An estimated 23.3 million counterfeit watches are currently in circulation in the US.

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

Holmes works undercover as a distributor to be credible and faces fear in his line of work.

Counterfeit watches now come with boxes and authentication certificates, making them more convincing.

Cheaper knockoffs have improved manufacturing, including all trademark details.

People buy high-end counterfeit watches for a fraction of the cost because they are near clones of the original.

The term 'epic' is used to describe counterfeit watches that are nearly indistinguishable from the original.

For brands like Rolex, the only way to tell an authentic watch from a counterfeit is by examining the movement.

Counterfeit manufacturing replicates real-world manufacturing, often in places with cheap labor.

Chinese factories use the same machines and stolen software as the real companies.

Chinese marketplaces offer inspection tiers where sellers can obtain a 'clean bill of health'.

Some Chinese factories use forced labor, and the logistics from China have improved significantly.

Most counterfeit products come out of major ports in Guangzhou and are shipped as affiliates.

Quality control in counterfeiting includes high-res photos and correct shipping labels.

Counterfeit watches are often shipped domestically from a distributor in Pennsylvania to appear more trustworthy.

Most counterfeit watches reach the US through the US Postal Service or DHL, shipped individually.

Counterfeit distributors are not deterred by obstacles due to high profits and the ability to replace seized goods.

The demand for non-deceptive counterfeits is driven by people wanting a bargain and the thrill of getting something over on the system.

The gray market offers legitimate products at a discount but can also be a source of counterfeit goods.

Secondhand markets are self-regulated and can include a mix of genuine and counterfeit products.

Repair markets can be shady, with cases of gold being replaced with gold-plated in genuine watches.

Luxury brands dislike the secondary market as it detracts from the sale of new products.

Rob Holmes' father was involved in catching counterfeit sellers on Canal Street in the 1980s and 1990s.

Canal Street was the epicenter for counterfeit watches in the US, with operations moving to Santee Alley in Los Angeles.

Holmes and his brother continue their father's legacy in the fight against counterfeit watches.

Counterfeit watches can be identified by examining details such as the cyclops magnifier, brand name printing, and bezel quality.

Federal laws focus on trafficking of counterfeit goods, while sale and display are governed by state laws.

Civil penalties for selling counterfeits can be severe, including high restitution costs.

The Born to Kill gang once put a bounty on Holmes' father's head due to his work against counterfeits.

Transcripts

My name's Rob Holmes. I'm a private investigator.

I've stopped millions of dollars of counterfeit watches

entering the US market.

This is how crime works.

It's estimated that 23.3 million counterfeit watches

are circulating in the US right now.

There have been plenty of stories

of the counterfeit-watch industry being tied to child labor,

sweatshops, and even human trafficking.

You're going to have organized criminals

who are doing this kind of stuff.

When I work undercover as a distributor,

I have to be very credible.

Doing what I do doesn't come without a little bit of fear.

Many of the fakes nowadays come with a box

and the authentication certificates.

You used to see watches that would just have

maybe one of the trademarks,

like just the crown on the face

but not the crown on the dial.

Now, manufacturing has gotten so good

that even the cheaper knockoffs have everything.

There are people who buy $1,000 counterfeit watches,

Patek, Rolex, Louis Vuitton,

all the big brand names.

And they buy these watches for 1,000 bucks

because they are near clones.

And in that world, the current term is "epic."

You can't tell it from the original.

And especially with some of the brands, especially Rolex,

the only way you can tell is by opening up the watch

and looking at the movement.

Because a Rolex movement,

there's no mistaking a Rolex movement from a counterfeit.

I don't care how good the Chinese factories are.

A Swiss movement made by Rolex

is always going to be known once you open the back.

If it is sold in America,

there's a factory in China that makes an exact copy of it.

It's just a matter of how high the quality is.

Manufacturing in the counterfeiting world

replicates the manufacturing in the real world.

Wherever manufacturing is cheap,

that's where manufacturing is going to happen.

These factories can afford the same machines

that the real companies use, and they use the same software.

Often that software is stolen through industrial espionage.

On these Chinese marketplaces,

they have a tier for a manufacturer or a seller,

a tier level where you can obtain an inspection

by the marketplace.

They'll have a third-party inspector come in and take photos

and check your location for child labor,

all the regular things that people would look for,

and you can pay for a clean bill of health.

But there's no telling

what these factories are really doing.

We know that some Chinese factories use forced labor.

It used to be, the '80s, '90s, even into the early 2000s,

the watches would come here by container,

and then the logos would be put on

in factories here in the United States,

in sweatshops right in the major cities here in the US.

That's kind of stopped,

because the Chinese factories have become so good

that the American factories couldn't keep up

with the quality.

We find that most of the product comes out of major ports

and Guangzhou, inside Guangdong.

China became so good at logistics.

It was much easier for people

to sell as affiliates here in the United States

and have them shipped from the Chinese factories

or the middlemen.

This is how good these Chinese factories are.

QC, which means quality control.

They'll send you a high-res photo of your item

and the shipping label, so you can check the item,

make sure it's the right model, and also make sure

that the address is correct on your shipping label.

You say, "Yes, go ahead," boom.

Within a day or so, you'll get the tracking number.

Watches would be shipped in, say, one case of watches,

say 1,000 watches or 10,000 watches in a small portion.

And the rest of the container

would end up being beach balls,

you know, cosmetics, or anything, cheap stuff.

What they do is they ship it to their clearing house,

a distributor in Pennsylvania.

They slap a new label on it and ship it to you from there,

so it looks more domestic.

And when it looks more domestic, it looks more trusted.

But most counterfeit watches reach the United States

through the US Postal Service or DHL,

shipped individually to the seller.

You could buy one watch, you could buy five watches,

you could buy 100 watches.

I buy samples from all over the world.

One time I had a package sent to me

and it was a toy alarm clock.

I open it up. There was a watch inside.

I haven't received a disguised counterfeit in several years,

and I think it's because of how easy it is

to get across the border with just a little bubble wrap.

The watches you buy on the streets,

they're usually bought the same way by the seller.

If you buy 100 of them, they're 8 bucks apiece.

So you get 100 of those, but package is only this big.

Shipping's going to cost 80, 90 bucks.

And they know the Postal Service is flooded right now,

and Customs is flooded right now.

So it's really kind of a field day

for the mailing of counterfeit watches.

The US Customs can't inspect every single package.

They used to say they inspected one every thousand,

but I don't even know if that's possible anymore

with everybody buying $20 dresses and things like that.

Counterfeit distributors don't worry about the obstacles

because the profit is so high.

So if something gets stopped off at Customs,

they'll just ship you a new one.

And that happens very often, even with a container.

Those 10,000 watches, they get caught up in Customs,

that'll just be the cost of business.

So those obstacles are pretty simple for them to bypass.

In my perception, the demand for fakes,

non-deceptive counterfeits where you know it's fake,

is simply because people like

getting something over on the man.

From the '80s until now, I found that demand

has been pretty consistent throughout the years.

I mean, no matter what the economy's looking like,

people like a bargain, and people like to spend less

for something that looks nice.

Let me explain the gray market a little.

There is a market where people think they're getting a deal.

You'll see, you know, 20% off retail, things like that.

There's a gray market where things "fall off the truck"

and things are diverted

outside of the original supply chain.

And once they get here in the United States,

they can sell legitimate products,

this including the watch industry.

They can sell legitimate products

at 10%, 20% off the original price.

And they're real.

But these companies have databases

with those serial numbers in them.

And you take it to a real repair shop,

they stick it through the database,

because a lot of watches are stolen.

So you take it to a real repair shop,

"Oh, sorry, this watch was a gray-market product

intended for another place."

So that's why once you buy something on the gray market,

you're kind of always working underground.

So that leaves you susceptible

to buying the epic fakes,

the ones that are 1,000 bucks.

But you're paying six or seven,

because you think it's, wink, wink, you know,

falls off the truck.

And a lot of these companies too

that deal in the gray market do what's called mixing.

And what they'll do is they'll have some genuine gray market

and some that are counterfeit,

and they'll just mix them all in.

Or they'll sell, "You look like a sucker.

I'll sell you the fake, and I'll sell this guy the genuine."

It's a very interesting world, the secondhand market,

because it is kind of self-regulated.

Obviously they self-regulate because of lawsuits too.

You know, if I make a test buy from one of these sites

and it turns out to be counterfeit, they can get sued.

So yeah, so there's a lot of liability at stake there too.

So the legitimate ones don't do that.

But again, you'll have the shady ones,

especially the ones that you walk up in tourist areas

and they sell genuine secondhand watches,

but maybe the one you have is a fake.

I tell people whether you're going to buy a product

or you're going to have a product repaired,

go to an authorized dealer.

But yeah, these repair markets are very shady.

There was a case in the '90s

that my father and stepmother worked

called the Fort Worth Gold and Jewelry Exchange.

And this guy, his name was Ronnie Cooper.

He advertised in all the national magazines,

and he would have ads that said, "We buy gold,

we buy watches, we sell Rolex watches."

And he would even do repairs.

What he would do when he bought the watches

was he would replace the gold with gold-plated.

And he would constantly be doing that.

So you'd be buying a genuine watch,

but most of the gold was swapped out.

And he did this for many years.

And jewelers still do that.

They're often called Frankenwatches in the replica world.

He got five years, the guy.

He got five years for mail fraud.

That's what they got him on,

because all this stuff went through

shipping and the Postal Service and things like that.

The brands don't like the secondary market

because they take away from you buying a brand-new product.

My dad was the guy on Canal Street in the 1980s and 1990s

who caught the folks that were selling counterfeit watches.

I grew up in the '80s going on raids with my father

and making undercover buys.

Canal Street was the epicenter for counterfeit watches

in the entire United States.

They had Midtown. That was where all the folks

with the briefcases would show up, OK?

Those guys would walk around and, you know, the old,

"Psst. Hey, buddy, want to buy a watch?" That kind of thing.

Or they would set up a briefcase with legs

and they'd be very mobile.

In Chinatown, they would be standalone stores

with big metal roll-down, roll-up doors.

On raid days, they would go with a van

or a U-Haul truck with off-duty cops

and firemen inside the back of the trucks.

And they would have spotters along the way

who would go to local diners and tell them the addresses

where they've spotted those watches that day.

Then the people would fly out of the trucks,

and if they didn't get there in time

and the guys rolled down and locked the doors,

we had industrial-strength saws

where we could saw through those locks.

It wouldn't be uncommon for my father to come home

with a U-Haul truck full of bags,

Hefty bags full of counterfeit watches.

Actually, I was the only 14-year-old at my high school

that was walking around with a Rolex watch.

Everybody knew it was fake, but you know.

During my dad's Canal Street years,

he would hire out-of-work actors in New York

to disguise themselves

and go conduct undercover investigations.

Those people dressed up as homeless people, pregnant people,

everything you could think of,

so that they're going through one day at a time

and they don't look like the same person.

Doing enforcement on Canal Street, it was no hayride.

He had bodyguards,

and he also had constant threats.

There were people with guns shooting at them.

There were very often times where people

would come right after my father.

I've been investigating counterfeit watches professionally

since 1995.

So when I started my company, all the luxury brands

knew who I was, and they knew I started my own firm.

And then I started getting cases from the luxury brands.

During my undercover buy process,

you know, we have undercover identities

set up all over the United States,

so I could buy from the same website five times,

and they would think it's five different people.

I have every counterintelligence method you can imagine.

We do everything we can to make sure

that these identities are not traced back to us.

The brands usually work directly

with law enforcement if they can,

because it's expensive to hire an investigator.

My cases are typically cases that might go civil

or a case that law enforcement doesn't have the time for.

And then once my case is finished, completed,

it's put on what I call a silver platter,

and then they will pass it on to law enforcement.

There's various terminology in the counterfeit world.

In the watch industry, a replica is a near-perfect,

or at least lookalike version

with the trademarks of an actual product.

But then you have lower-level counterfeits.

You have, say, $300 to $500 counterfeits,

and they're mid-level.

And then you have anything under $300,

they call them s---ters.

The funny thing is those cheap watches,

they're the ones you buy on the street.

The keywords to find these counterfeits evolve

because of enforcement mechanisms.

You can't just Google "counterfeit Rolex"

or "counterfeit Louis Vuitton" or even "replica."

The word "replica" for the last 10, 12 years

has been pretty much blacklisted everywhere

along with brand names.

So they would come up with different words.

They would also use letter swaps.

Like for Rolex, they could use R-O-I-E-X-X.

If you're seeing words like replica, clone,

dupe, or 1:1, one to one,

you're probably looking at a counterfeit.

If you're trying to figure out if a watch is a counterfeit,

first you need a magnifying glass,

and then you want to look at the details on the watch face.

If there's any imperfection whatsoever, it's not real.

One of the great myths of counterfeit watches

is that the genuine has a sweeping hand

and the counterfeit has a ticking hand.

Well, that was resolved sometime in the mid-'90s.

So most counterfeits now have a sweeping hand.

So don't be fooled into thinking that's

a way to tell a counterfeit from a real.

So, I was just handed a watch for filming purposes,

and I can tell this one's genuine,

because, see, there's a crown logo

at the 12 o'clock mark.

And the crown logo

has an oval at the headpiece part of the crown,

and that's etched in perfectly.

The quality of the craftsmanship of this watch

is impeccable.

The brand name is printed there perfectly.

Also with many of these watches,

there's a magnifier at the date. It's called the cyclops.

And counterfeiters don't always get that right.

And also the date with the magnifier

can just be a little off. It's not perfectly,

like, if the number's 12, the day's 12,

it's going to be exactly there.

It's not going to be partially there.

And a lot of the counterfeits,

they just can't get the date exactly right.

And the cyclops too.

There is, the original brands have

a very specific non-reflective material

they put on that cyclops

that holds it on to the watch.

And that's very hard to duplicate as well.

So the clarity of the cyclops is very, very important.

Also, you'll see the brand name on the inside of the band.

Now, the high-end counterfeits may have those,

but you do have to look for these things.

Also the registered trademark on the back,

you can look for that

and see if they've gone to that great detail.

And with this particular watch, because it was made,

I'd say, probably at least 20 years ago, maybe longer,

in order to find the serial number,

you would have to actually take off the band here.

And you would have underneath,

underneath the band edge here and here,

you'll have a serial number

and you'll have a model number.

Especially with the Submariner and the diving watches,

the bezel is very difficult to make.

So the Swiss engineering of the bezel

is going to be perfect with a genuine watch.

Many of the counterfeits,

it's kind of jingly as you're moving it.

T-t-t-t-t-t-t-t.

A lot of this stuff isn't one specific thing.

You look at the quality and you say,

"Wait, this isn't real."

Because this is a little shaky,

it should be more solid;

it's a little light, should be heavier.

The counterfeit-watch industry is a financial crime.

You deal with all kinds of fraud in this world,

especially here in the United States.

You know, bank fraud, all this kind of stuff.

In the 1940s, there was a law passed called the Lanham Act,

and it made counterfeiting trademark goods illegal.

And that law stood for a very long time.

There were no penalties, though. It was sort of symbolic.

And then my father

along with a very small community back then

of folks lobbying the US government to strengthen the laws,

the anti-counterfeiting act of 1984 was passed.

And the anti-counterfeiting act of 1984 created penalties

for each one of these offenses.

Currently, the federal laws are in trafficking.

So trafficking is illegal federally,

so that's where Customs comes in.

But most of the sale or display of counterfeit goods

is state law.

So in New York, New Jersey, California,

almost every state has a display for counterfeit

as a penalty, and also in their penal codes,

the sale of counterfeits.

I've seen people face some serious jail time

for selling counterfeits.

Often they're the most egregious.

But the street-level folks, it's the repeaters.

Just like with drugs.

Someone purchasing counterfeit goods online

probably isn't going to enter law enforcement's radar

or the brand's radar unless they are named

or discovered as a supplier to someone else.

Often because purchasing isn't necessarily,

it's not illegal to purchase, but obviously trafficking is,

and you're bringing things over across the border.

I've seen the civil penalties get very steep.

When my clients want to sue someone,

often we'll look for assets.

If a person owns a house and the mortgage is paid off,

these people have the ability to pay $70,000,

$100,000 in restitution,

and a judge will often comply.

So I've seen people's lives get ruined

by selling counterfeits.

It was in the late '80s when my father came across BTK,

the Born to Kill gang, Vietnamese Mafia.

One day, his brother who worked with him

saw a wanted poster with a $200,000 price

on my father's head.

Turns out the Born to Kill gang,

they were charging all of these vendors

for protection,

but they couldn't protect them against my father.

So they figured if they killed my father,

they would at least alleviate the problem

and they would justify their own extortion racket.

And because of that, we had locks on every door,

every window.

And my father told me one day, I remember, he said,

"Rob, I know you don't like listening to me,

but if I ever say duck or jump, you better do it,

because it might mean your life."

And I always took that seriously after that. I still do.

When my father's Canal Street work

started really taking off,

I was uninterested in the family business.

I was 17, 18, 19 years old,

and I was kind of going off doing my own thing.

But my brother was 13, 14 years old,

and he was primed to do this work.

He was bred for it.

So my brother was running out gathering license plates

and looking in windows,

in factory windows and things like that.

I actually rebelled against the family business

and I went to Bible college.

And I decided to drive to LA to become a stand-up comic.

It turns out I wasn't very funny,

but in the meantime, I needed a day job.

But then I started going on raids,

just like my father, on the opposite coast.

And it was amazing.

Los Angeles' area, similar to Canal Street in New York,

it's called Santee Alley.

And it was a several-block area,

just like New York's Chinatown.

It is filled, filled with counterfeits.

In the '90s, Santee Alley, just like Canal Street,

it was the Wild West.

Everywhere you went, there were watches everywhere.

I mean, people had them up and down their arms.

They had them in briefcases.

They had them at booths.

They had people who rented space out in front of booths

and paid thousands of dollars for that.

Yeah, and then after years and years of doing that,

in the '90s, my boss retired.

In 2001, I started my own company.

So, I started my company in '01,

and I was working a lot of the similar cases

with my father and my brother.

So then my father passed in '04.

Yeah, after my father died, I thought it was important

to continue the family legacy.

His company folded because he had nobody in New York

to follow in his footsteps.

And then after he passed, my business was taking off,

and I needed to duplicate myself.

And I figured, what better way to duplicate myself

than to partner with my brother?

Ever since then, I mean, there's not a day that goes by

that we don't think about Dad.

I mean, it's hard for me not to look at my brother

and see something, you know, one of my dad's traits.

We grew up watching him work.

He was our hero, and we emulate him. We both do.

So, yeah, I mean, it's nice.

I mean, sometimes I feel like he's in the room.