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Federal Crimes: Counterfeiting 101

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Federal Crimes: The United States, until recently, left counterfeit issues to the civil arena.  If the situation needed to be addressed criminally, the federal government left it up to the states.  The Anti-Counterfeiting Act of 1984 was drafted to make it easier to bring criminal charges at the federal level. 

In 1994, Congress added counterfeiting under 18-USC §2320 (c)(7)(D) to the list of violations that constitute “specified unlawful activity” under the money laundering statute, 18 U.S.C. § 1956. Thereforce, proceeds allegedly gained from trafficking in counterfeit goods can now form the basis of a money laundering charge. This effectively “beefed up” the government’s ability to prosecute these cases.  Penalties for violations of § 1956 and § 1961 are substantially greater than for trafficking in counterfeit goods. A violation of § 1956 carries a maximum sentence of twenty years in prison and a fine of $500,000 or twice the amount involved in the transaction. There is also a civil penalty of up to $10,000 or the value of the funds involved in the transaction, whichever is greater. In 1996, § 1961 was amended to include § 2320 as a RICO “predicate offense”. Once again, this “beefed up” the government’s ability to prosecute these type of cases with much more severe penalties.  A violation of RICO carries a maximum penalty that includes twenty years’ imprisonment and a fine of up to “twice the gross profits or other proceeds” of the racketeering activity. 18 U.S.C. § 1963. Long and short of this brief legislative history of counterfeiting laws in the US, is that a case is prosecuted much more punitively than a mere 30 years ago.

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