Amazon turns to team of ex-prosecutors to try to fight counterfeiters

In 2018, police showed up at a nondescript industrial warehouse in New York’s Brooklyn Navy Yard to investigate reported counterfeits. 

Federal agents were looking for knockoff military gear as part of an investigation into a distributor, called California Surplus, that had secured a $20 million contract to supply the U.S. military with specialized uniforms. They’d already recovered thousands of boxes of the stuff from a nearby New Jersey warehouse, according to court documents. 

California Surplus, it turned out, was selling Chinese-made counterfeit goods designed to look like gear from one of the top military outfitters in America, Crye Precision. Crye’s Brooklyn headquarters happened to be located just around the block.

The owner of California Surplus, Ramin Kohanbash, and co-conspirator Bernard Klein pleaded guilty in 2019 to trafficking counterfeit goods and were given jail time.

Counterfeiting has ballooned into a massive problem for Crye, costing it millions of dollars a year, said Jonathan Antone, the company’s general counsel. Crye loses out on valuable sales to unlicensed mills overseas that print copies of its patented camouflage, called MultiCam, on ponchos, pants, shirts and hats that sell on Amazon and other marketplaces without Crye’s permission.

Launched in 2000, Amazon’s marketplace allows businesses to hawk their goods on the company’s site. It’s amassed millions of sellers, and now accounts for more than half of Amazon’s overall retail sales volume. While the marketplace has helped Amazon bring in record revenue, it’s also been found to host counterfeit, unsafe and even expired goods.

By 2016, sellers were speaking out about Amazon’s growing counterfeit problem, telling CNBC of the company’s effort to openly court Chinese manufacturers. Sales from Chinese-based sellers on the site more than doubled in 2015 .

Counterfeits became a more frequent problem on Amazon and across the internet as the pandemic supercharged online shopping, said Jason Goldberg, chief commerce strategy officer at advertising firm Publicis. And unlike brick-and-mortar stores, which may offer up to 150,000 products, online marketplaces like Amazon can carry hundreds of millions of items, Goldberg said. That vast selection can be harder for platforms to police.

“There’s a lot more space on that digital shelf for potential counterfeit products,” he added.

Amazon has rolled out tools like Project Zero and Brand Registry that let brands report and remove suspected counterfeits themselves. In 2020, it launched an internal division , called the Counterfeit Crimes Unit, that partners with brands and law enforcement agencies to take on fraudsters.

The team, which now includes 35 people, is made up of data analysts, investigators and former federal prosecutors, many of whom…