A counterfeit is an imitation that is made usually with the intent to deceptively represent its content or origins. The
word counterfeit most frequently describes forged currency or documents, but can also describe clothing, software, electronic stock shares or certificates, pharmaceuticals, watches, or more recently, cars and motorcycles, especially when this results in patent infringement or trademark infringement.
This covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (e.g.
prescription drugs, computer flash drives), functional but inferior items (Memory Sticks, blank videotapes) to fully functional items illegally
manufactured without paying copyright fees (CDs, DVDs,
computer software, toys). In the latter case, there is
often little or no attempt at disguising its origin as the end user will be aware that the counterfeit product will work at least
as well (and sometimes better than) the original.
By contrast, a knockoff item may imitate a well-known one, be sold for a lower price, and be of inferior quality, but
there is usually no attempt to deceive the buyer, or infringe upon brand names, patents, trademarks or copyrights. An example of
a knockoff item is Dynacell batteries.
Some counterfeits may even have been produced in the same factory that produces the original, authentic product, using the
same materials. The factory owner, unbeknownst to the copyright owner (and perhaps also the manufacturing staff), simply orders
an intentional 'overrun'. Without the employment of anti-counterfeiting measures, identical manufacturing methods and materials
make this type of counterfeit (and it is still a form of counterfeit, as its production and sale is unauthorised by the copyright
owner) impossible to distinguish from the authentic article.
To try to avoid this all too common occurrence, companies may have the various parts of an item manufactured in independent
factories and then limit the supply of certain distinguishing parts to the factory that performs the final assembly to the exact
number required for the number of items to be assembled (or as near to that number as is practicable) and/or may require the
factory to account for every part used and to return any unused, faulty, or damaged parts. To help distinguish the originals from
the counterfeits, the copyright holder may also employ the use of serial numbers and/or holograms etc., which may be attached to
the product in another factory still.
Counterfeiting of money
History
Roman coins were struck, not cast, so these coins molds were created for forgery
Counterfeiting is probably as old as money itself. Before the introduction of paper money,
the main way of doing it was to mix base metals in what was supposed to be pure gold or
silver. Also, individuals would "shave" the edges of a coin so that it weighed less than it was
supposed to, a process known as clipping. This is not counterfeiting but the exponents could use the precious metal clippings to
make counterfeits. A fourrée is an ancient type of counterfeit coin, in which a base metal core
has been plated with a precious metal to look like its solid metal counter part. Kings often dealt very harshly with the
perpetrators of such deeds. In 1162, Emperor Gaozong of
Song had promulgated a decree to punish the counterfeiter of Huizi to death and
to reward the informant.[1] The English couple Thomas Rogers and Anne Rogers were
convicted on 15 October 1690 for "Clipping 40 pieces of Silver"
(in other words, clipping the edges off silver coins). Thomas Rogers was hanged,
drawn and quartered and Anne Rogers was burnt alive. The gruesome forms of punishment were due to the two's acts being
construed as "treason", rather than simple crime. In America, counterfeiting also used to be
punishable by death; for example, paper currency printed by Benjamin Franklin often
bore the phrase "to counterfeit is death."[1] The theory behind such harsh punishments was that one who had the skills to
counterfeit currency was considered a threat to the safety of the state, and had to be eliminated. Far more fortunate was an
earlier practitioner of the same art, active in the time of the Emperor Justinian, who got
the nickname Alexander the Barber. Rather than being executed, when he was caught the Emperor
decided to employ his financial talents in the government's own service.
Modern counterfeiting begins with paper money. Nations have used counterfeiting as a means of warfare. The idea is to overflow
the enemy's economy with fake bank notes, so that the real value of the money plummets. Great
Britain did this during the Revolutionary War to reduce the value of
the Continental Dollar. Although this tactic was also employed by the
United States during the American Civil War,
the fake Confederate currency it produced was of superior quality
to the real thing.
Instances
A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. An
example of this is the Portuguese Bank Note Crisis of 1925, when the British banknote
printers Waterlow and Sons produced Banco de
Portugal notes equivalent in value to 0.88% of the Portuguese nominal Gross Domestic Product, with identical serial
numbers to existing banknotes, in response to a fraud perpetrated by Alves dos Reis.
Similarly, in 1929 the issue of postage stamps celebrating the Millennium of Iceland's
parliament, the Althing, was compromised by the insertion of "1" on the print order, before the
authorised value of stamps to be produced (see Postage stamps and
postal history of Iceland.)
In 1926 a high-profile counterfeit scandal came to light in Hungary, when several people were arrested in the Netherlands while
attempting to procure 10 million francs worth of fake French 1000-franc bills which had been produced in Hungary; after 3 years,
the state-sponsored industrial scale counterfeit operation had finally collapsed. The League
of Nations' investigation found Hungary's motives were to avenge its post-WWI territorial losses (blamed on
Georges Clemenceau) and to use profits from the counterfeiting business to boost a
militarist, border-revisionist ideology. Germany and Austria had an active role in the conspiracy, which required special
machinery. The quality of fake bills was still substandard however, due to France's use of exotic raw paper material imported
from its colonies.
During World War II, the Nazis attempted to do a similar
thing to the Allies with Operation Bernhard. The
Nazis took Jewish artists in the Sachsenhausen
concentration camp and forced them to forge British pounds and American dollars. The quality of the counterfeiting was
very good, and it was almost impossible to distinguish between the real and fake bills. The Germans could not put their plan into
action, and were forced to dump the counterfeit bills into a lake. The bills were not recovered until the 1950s.
Today the finest counterfeit banknotes are claimed to be U.S. dollar bills
produced in North Korea, which are used to finance the North Korean government, among other
uses. The fake North Korean copies are called Superdollars because of their high
quality. Bulgaria and Colombia are also significant sources
of counterfeit currency. Recently, on May 23rd, 2007, the Swiss government has raised some doubt as to the ability of North Korea
to produce the "Superdollars".
There has been a rapid growth in the counterfeiting of Euro banknotes and coins since the launch
of the currency in 2002. In 2003, 551,287 fake euro notes and 26,191 bogus euro coins were removed
from EU circulation. In 2004, French police seized fake 10 euro and 20 euro notes worth a total of
around €1.8 million from two laboratories and estimated that 145,000 notes had already entered circulation.
In the early years of the 21st century, the United States Secret Service
has noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn their attention towards the
Euro.
In Russia, authorities estimate that 90% of products sold to people are counterfeit
[citation needed]
In 2006, a Pakistani government printing press in the city of Quetta was accused of churning out large quantities of
counterfeit Indian currency, The Times of India reported based on Central Bureau of Intelligence investigation. The rupee notes
are then smuggled into India as 'part of Pakistan's agenda of destabilising (the) Indian economy through fake currency,' the
daily said. The notes are 'supplied by the Pakistan government press (at Quetta) free of cost to Dubai-based counterfeiters who,
in turn, smuggle it into India using various means,' the report said.[2] This money is allegedly used to fund terrorist activities inside India. The recent blasts
in Mumbai were funded using fake currency printed in Pakistan.[citation needed]
Effect on society
Some of the ill-effects that counterfeit money has on society are:[3][4]
- Reduction in the value of real money
- Increase in prices (inflation) due to more money getting circulated in the economy
- Decrease in the acceptability (satisfactoriness) of money
- Companies are not reimbursed for counterfeits. This forces them to increase prices of commodities
At the same time, in countries where paper money is a small fraction of the total money in circulation, the macroeconomic
effects of counterfeiting of currency may not be significant. The microeconomic effects, such as confidence in currency, however,
may be large.[5]
Anti-counterfeiting measures
Two forged
UK pound coins. The left coin shows
poor surface clarity, irregular reeding and no side lettering. The right coin demonstrates poor metal quality.
Traditionally, anti-counterfeiting measures involved including fine detail with raised intaglio printing on bills which would allow non-experts to easily spot forgeries. On coins,
milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been
scraped off. This detects the shaving or clipping (paring off) of the rim of
the coin. However, it does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this
technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold. In early paper money in
Colonial North America, one creative means of deterring
counterfeiters was to print the impression of a leaf in the bill. Since the patterns found in a
leaf were unique and complex, they were nearly impossible to reproduce.[2]
In the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. In
response, national engraving bureaus began to include new more sophisticated anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, microprinting and inks whose colors changed
depending on the angle of the light, and the use of design features such as the "EURion
constellation" which disables modern photocopiers. Software programs such as Adobe
Photoshop have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes.[6] There also exist patches to counteract these measures.
For U.S. currency, anti-counterfeiting milestones are as follows:
The Treasury had made no plans to redesign the $5 bill using colors,
but recently reversed its decision, after learning some counterfeiters were bleaching the ink off the bills and printing them as
$100 bills. It is not known when the $100 bill will be redesigned
in this format, but the new $10 bill (the design of which was revealed in
late 2005) entered circulation on March 2, 2006. The $1 bill and $2 bill are seen by most counterfeiters as having too low of a value to counterfeit, and
so they have not been redesigned as frequently as higher denominations.
In the 1980s counterfeiting in the Republic of
Ireland twice resulted in sudden changes in official documents: in November 1984 the £1 postage stamp, also used on savings cards for paying television licences and telephone bills, was
invalidated and replaced by another design at a few days' notice, because of widespread counterfeiting. Later, the £20
Central Bank of Ireland Series B banknote was
rapidly replaced because of what the Finance Minister described as "the involuntary privatisation of banknote printing".
In the 1990s, the portrait of Chairman Mao Zedong was
placed on the banknotes of the People's Republic of China to combat
counterfeiting, as he was recognised better than the generic designs on the renminbi
notes.
In New Zealand, all notes since 2000 have been printed with multi-colored inks on transparent plastic, with see-through
sections that are almost impossible to reproduce on photocopy machines.
In Australia, the original paper decimal currency banknotes introduced in 1966 were eventually replaced with new designs
printed on clear polyester film which also have see-through sections.
Money art
A subject related to that of counterfeiting is that of money art, which is art that incorporates currency designs or themes.
Some of these works of art are similar enough to actual bills that their legality is in question. While a counterfeit is made
with deceptive intent, money art is not - however, the law may or may not differentiate between the two. See JSG Boggs, the American artist best known for his hand-drawn, one-sided copies of US banknotes which he
spends for the face value of the note.
Famous counterfeiters
"Look 'ere—this arf-crown wont do its got no milling on its hedge." "Blimy! Nor it 'as! I knew I'd forgotten somefink."
Cartoon in Punch magazine 25 August 1920. A half crown was a coin worth one-eighth of a pound.
- Fake denominations of United States currency
- Mary Butterworth - a counterfeiter in colonial America
- Samuel C. Upham - the first known counterfeiter of Confederate money during the American Civil
War. His activities began or became known in early July 1862.
- E.M. Washington, produces artwork attributed to his fictitious grandfather and
other 20th Century artists.
- Wesley Weber - was sent to prison for counterfeiting the
Canadian 100 dollar bill.
- Anatasios Arnaouti - a British counterfeiter of more than £2.5 million in fake
money, sentenced in 2005
- Rick Masters (fictional character, played by Willem Dafoe) - a master counterfeiter in William Friedkin's
movie To Live and Die in L.A..
- Catherine Murphy was convicted of coining in 1789 and was the last woman to suffer execution by burning in England.
- Frank William Abagnale Jr., - Worked under 8 identities, including his first as
Pan American Airlines Pilot Frank Williams, in over 5 years, passing over
$2.5 million in bogus checks in over 26 countries and all 50 states. He was arrested in France at an Air France ticket counter
when an agent recognized his face from a wanted poster, and then was extradited to Sweden and then back to the United States. The
movie Catch Me if You Can was loosely based on his life.
- Stephen Jory - Great Britain's most renowned counterfeiter, he started his career by selling cheap perfume in designer
bottles. He later established his own illegal printing operation to produce and distribute an estimated five billion pounds in
counterfeit currency throughout the United Kingdom.
- William Chaloner, - A successful British counterfeiter convicted by Sir Isaac Newton and hanged, drawn and quartered on 23 March
1699.
Counterfeiting of documents
-
Forgery is the process of making or adapting documents with the intention to deceive. It is a form of fraud, and is often a key technique in the execution of identity theft.
Uttering and publishing is a term in United States law for the forgery of
non-official documents, such as a trucking company's time and weight logs.
Questioned document examination is a scientific process for
investigating many aspects of various documents, and is often used to examine the provenance and verity of a suspected forgery.
Security printing is a printing industry specialty,
focused on creating documents which are difficult or impossible to forge.
Photo tampering
Many photos that archivists believe to be faithful illustrations of historical events turn out to be nothing more than staged
or altered pictures. While picture tampering is not new, contemporary counterfeit photographs are easy to create using software
programs such as Adobe Photoshop.
In an example of early twentieth-century photo tampering, military photographer Lt. Ivor
Castle produced a series of counterfeit photographs of First World War battles through the technique of photo montage. Photos can also be altered by painting the negative.[7]
Counterfeiting of consumer goods
The spread of counterfeit goods has become global in recent years and the range of goods subject to infringement has increased
significantly. It is often mentioned that Counterfeit Goods make up 5 to 7% of World Trade, however, these figures cannot be
substantiated[8]. A recent report by the Organisation for Economic Co-operation and Development indicates
that up to 200 Billion U.S. Dollars could have been in counterfeit and pirated goods in 2005.[9]
Certain consumer goods, especially very expensive or desirable brands, or those which are
easy to reproduce cheaply, have become frequent targets of counterfeiting. The counterfeiters attempt to deceive the consumer
into thinking they are purchasing a legitimate item, or convince the consumer that they could deceive others with the imitation.
An item which doesn't attempt to deceive, such as a copy of a DVD with missing or different cover art, is often called a
"bootleg" or a "pirated copy" instead.
Apparel and accessories
Counterfeit clothes, shoes and handbags from designer brands such as Louis Vuitton,
Chanel and Gucci are made in varying quality; sometimes the intent
is only to fool the gullible buyer who only looks at the label and doesn't know what the real thing looks like, while others put
some serious effort into mimicking fashion details. The popularity of designer jeans,
starting with Jordache in 1978, spurred a flood of knockoffs. Factories that manufacture
counterfeit designer brand garments and watches usually originate from developing countries such as China. Many international tourists visiting Beijing will find a wide selection of
counterfeit designer brand garments at the infamous Silk Street.
Expensive watches such as Rolex are frequently subject to
counterfeiting; it is a common cliché that any visitor to New
York City will be approached on a street corner by a vendor with a dozen such counterfeit watches inside his coat, offered at amazing bargain prices. It has been known that some of
the watches have no real hands at all, but merely painted faces. While the unsuspecting buyer walks off, the vendor makes a hasty
getaway.
In Malaysia, Thailand and Vietnam, high-quality watch fakes with self-winding mechanisms and full working functions sell for
as little as US $20.
Media products
Compact Discs, videotapes and DVDs, computer software and other media which are easily copied can be
counterfeited or "pirated", and sold through vendors at street markets, night markets, mail order, and numerous Internet sources, including open auction sites like eBay.
Music enthusiasts may use the term "bootleg recording" to differentiate otherwise
unavailable recordings from pirated copies of commercially released material.
In India, copies of bestselling books with photocopied jackets sell for a fraction of the genuine retail price. They are
openly sold on streetcorners, with hundreds of copies spread out on blankets.
Drugs
-
A counterfeit drug or medicine is one which is produced and
sold with the intent to deceptively represent its origin, authenticity or effectiveness. It may be one which does not contain
active ingredients, contains an insufficient quantity of active ingredients, or
contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate,
incorrect, or fake packaging.
Illegal street drugs may also be counterfeited, either for profit or for the
deception of rival drug distributors or narcotics officers.
See also
References
Footnotes
External links
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)