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.
