Counterfeit goods fraud: an account of its financial management
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Counterfeit goods fraud: an account of its financial management Georgios A. Antonopoulos 1
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& Alexandra Hall & Joanna Large & Anqi Shen
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# Springer Nature B.V. 2019
Abstract Counterfeit goods fraud is stated to be one of the fastest growing businesses in the world. Academic work examining the flows of counterfeit goods is beginning to build momentum. However, work analysing the financial mechanisms that enable the trade has been less forthcoming. This is despite the fact that over the last two decades official and media discourses have paid increasing attention to ‘organised crime’ finances in general. Based on an exploratory study that brought together academic researchers and law enforcement practitioners from the UK’s National Trading Standards, the aim of the current article is to offer an account of the financial management in the counterfeit goods trade. Focusing on tangible goods, the article addresses the ways in which capital is secured to allow counterfeiting businesses to be initiated and sustained, how entrepreneurs and customers settle payments, and how profits from the business are spent and invested. The study covers the UK in the broader context of what is a distinctly transnational trade. Keywords Counterfeiting . Fakes . Fraud . Organised crime . Illegal markets . Crime-money
Introduction The trade in counterfeit goods is stated to be one of the fastest growing businesses in the world. According to the World Economic Forum (2015: 3) Bcounterfeiting and piracy […] cost the global economy an estimated $1.77 trillion in 2015, which is nearly 10% of the global trade in merchandise^. Similarly, the International Chamber of Commerce (ICC) (2011:1) suggests that the counterfeiting of goods is a form of fraud that Bcreates enormous drain on the global
* Georgios A. Antonopoulos [email protected]
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Department of Criminology, Law & Policing, Teesside University, Middlesbrough TS1 3BX, UK
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Northumbria University, Sutherland Building, Newcastle-upon-Tyne NE1 8ST, UK
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School for Policy Studies, 8 Priory Road, Bristol BS8 1TZ, UK
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Northumbria University Law School, Newcastle-upon-Tyne NE1 8ST, UK
G.A. Antonopoulos et al.
economy, crowding out billions in legitimate economic activity and facilitating an Bunderground economy^ that deprives government of revenues for vital public services, forces higher burdens on tax payers, dislocates hundreds of thousands of legitimate jobs and exposes consumers to dangerous and ineffective products^. A Home Office study (Mills et al. 2013), estimated the scale of counterfeiting in the UK at £90 million per annum, an estimate which has been calculated on the basis of seizure data. The social and economic costs of counterfeiting (estimates of lost revenue to legitimate business, lost revenue to the exchequer, lost jobs and enforcement costs, including Criminal Justice System costs) were estimated at £400 million per annum (Mills et al. 2013). Indeed, it is considerably difficult to accurately measure the size and impact of the global trade in co
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