City Council Considers Bill Punishing Buyers Of Counterfeit Goods

NEW YORK (CBSNewYork/AP) -- It's one of the worst kept secrets in New York City.

Hidden around the city are counterfeit goods labeled "Prada'' or "Louis Vuitton'' or some other luxury brand that are sold for a pittance to bargain hunters from around the world who flock to Chinatown.

"I've bought bags and I've bought a bunch of fake watches for my boyfriend," Melissa Juszczak told CBS 2's Tony Aiello on Thursday.

Then there's Canal Street, the one part of the city the tourists flock to in droves to buy counterfeit designer products.

"It's kind of the thing to do. It's fun. A lot of tourists come here to get the knock-off purses," Melissa E. of Gramercy told CBS 2's Jessica Schneider, adding when asked if she thinks it's nothing more than innocent fun, "Yes, I do."

However, if a proposed bill passes the City Council, customers caught buying these items could be punished with a fine of up to $1,000, or even prison time.

"Making or selling counterfeit trademark goods is already a crime, but our current laws only target the supply of these items and not the demand," the bill's sponsor, Councilmember Margaret Chin, said at a public hearing Thursday. "We cannot keep trying to tackle this problem in the same way because it's not working."

Chin said it's important to deter people from purchasing counterfeit goods because buying the fakes hurts local artists and companies as well as the city.

"Counterfeit goods cost our city an estimated $1 billion in tax revenue annually," Chin said.

The demand for illegal knock-offs is so high, buyers are bused in.

"There are people who buy this stuff and they bring it back home to resell it. In those kind of situations, they definitely should spend a year in jail," Chin said.

One immigrant from Senegal displayed a card of all the fake handbags he has hidden nearby for sale.

He didn't want his face shown on camera.

"It's hidden because we don't want the police to arrest us," the counterfeit goods dealer told Aiello.

Critics argue the phony goods are made in sweatshops and say sales help fund organized crime.

Peter Vallone Jr., chair of the Public Safety Committee, said he doesn't support making the buying of counterfeit goods a Class A misdemeanor.

"In New York City, there is no real fine or law against buying a counterfeit good and this is a serious problem," Vallone said. "A year in jail is a little tough even for me, which is rare...I would absolutely consider making it a violation."

Kathleen McGee, director of the Mayor's Office of Special Enforcement, said she fears the measure would deter New Yorkers and tourists from shopping for legitimate goods.

She suggested using a public education program stressing "the illegality of the sale, the possible funding of other illegal activity through sale -- including terrorism and organized crime, the inherent lack of quality of the goods, the lack of sales tax revenue needed to fund our city works and the actual danger presented by certain types of counterfeit goods."

Others raised a red flag about prosecuting buyers.

"Unless the police officer is present at the purchase and overhears a conversation of 'this is fake, you know that?' 'Yes I do, I still want to pay $50,' it would be impossible for us to prove," Brooklyn prosecutor Karen Turner said.

Critics also said proposed fines, including up to a year in jail, are too harsh.

"Do you really want to waste tax dollars on someone who bought a fake bag?" one woman said.

"I think it's going to be unmanageable. I don't think they can realistically fine people for it," Melissa E. told Schneider.

Chin said she'll consider changing the bill, but believes the best way to dry up the supply is to target the demand.

She said she expects a vote on the bill sometime in the coming months.

You May Also Be Interested In These Stories:

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)