"Operation Chain Reaction" cracks down on counterfeits

Tuesday - 6/21/2011, 9:41am EDT

Erik Barnett, Assistant Deputy Director, Immigration and Customs Enforcement

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By Jory Heckman
Federal News Radio

Counterfeiters used to hawk luxury handbags. Now they're in the market selling poor-quality airbags and inauthentic goods that could put the armed services and the public at risk.

The National Intellectual Property Rights Coordination Center (IPR Center) is cracking down on counterfeit parts that have been sold to the Department of Defense and the federal government.

The IPR Center's new initiative, "Operation Chain Reaction," will zero in on fraudulent goods that pose a risk for the military and the public at large. Nine of the center's 18 member agencies will participate in the program including: Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP), and the Federal Bureau of Investigation (FBI), among others.

"It's not just the DoD supply chain but the federal supply chain in general that has also, unfortunately, suffered from contractors inserting counterfeit products into the supply chain," said Erik Barnett, assistant deputy director of ICE, in an interview with Federal News Radio.

"These are very serious products and it really is a troubling trend," said Barnett. "Where counterfeiting used to be really just luxury handbags and Rolex watches - the things that we commonly thought were sold in flea markets and on the street corner - now counterfeiters have really decided that there is a vast profit to be made by selling not just to the Defense Department but the federal government at large."

According to Barnett, an individual was sentenced to 51 months in federal prison for selling counterfeit Cisco network cards to the U.S. Marine Corps. The counterfeiter, he said, obtained parts from a Chinese manufacturer "understanding that they weren't legitimate Cisco parts."

"We've also seen electronics brokers trying to sell counterfeit integrated circuits to DoD for a Navy contract for components that were destined for implementation into ship- and land-based antenna," said Barnett.

Manufacturers like Cisco have an approved list of companies for resale, but Barnett says counterfeit happens more at an individual level.

"It's unfortunately based on individuals making grave misrepresentations about the products that they are supplying," he said. "Individuals that literally jeopardize public safety to make a couple of bucks, not just in the military context, but we're also seeing counterfeit ball bearings that could go into airline parts."

Barnett has also been looking into cases of counterfeit airbags.

"The counterfeiters have gotten extremely sophisticated in their packaging. They will mirror the packing to the best of their capability, which is really very good. And so you have to work with the rights holder on the serial numbers. You have to work on lot numbers, batch numbers, those sorts of things that the manufacturer will know has already been distributed or is not a genuine number."

Barnett said he was optimistic about the plan of attack outlined in Operation Chain Reaction.

"The agencies are already working together at the IPR Center but this is an operation that now will guide them and specifically exchange information on a regular basis about leads that are coming in," he said. "When there is a potential investigation, everyone will be able to coordinate together and make sure that all information that is known to each agency becomes known to all others."

Jory Heckman is an intern with Federal News Radio.

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