When passing through Chinatown, it is nearly inevitable that one will run into several merchants who are selling fake Gucci bags, and other bogus branded items.
Upon a preliminary investigation by Gioia’s office two weeks ago, 45% of the stores on Canal St. between Broadway and Bowery seem to be involved in open sale of counterfeit products.
“This hurts taxpayers and hurts workers. And it contributes to a sense of lawlessness. It really has a negative impact on the city,” said Gioia, who is calling for the NYPD and the FBI to take more action.
Among many observations made at the investigation, an investigator at Canal St. and Centre St. was confronted by a man who wanted to sell him several watches. When the seller noticed the investigator taking notes, the retailer asked if he was a policeman and asked him to leave the area.
Gioia said the irrepressible growth can be explained with the “broken window” theory. “If you don’t fix a broken window on a factory, pretty soon when you come back, there will be thirty broken windows,” he said. “Lawlessness contributes to lawlessness.”
The counterfeit items cost New York City an estimated $1 billion a year in general tax revenue according to a 2004 report from Comptroller Bill Thompson. The counterfeiting activity is growing exponentially; the City captured $25 million in counterfeit goods in 2007—about three times more than in 2006, according to Police Commissioner Ray Kelly.
Gioia believes the illegal counterfeit businesses often exploit child labor, store products between residential and commercial buildings causing potential fire hazards, and moreover, they “drain money” from legitimate retailers in the region.
“Especially in such typical financial times, when New York really needs every dollar we can get, it’s just lawless. You can walk to Canal St.; it’s like the Wild West here, where the laws are being broken everyday out in the open. And it should stop,” said Gioia.
He drew a parallel between the counterfeit business presently on Canal St. and the pornography and entertainment industry that existed on Times Square a decade ago. Back then; people thought nothing could be done about the strip clubs on Times Square, yet continuous law enforcement improved the environment.
“But what you really need is the city and the department of consumer affairs to begin to take this seriously.” “When the enforcement happens, the legitimate business owners will feel comfortable and be able to make money with hard work while playing by the rules,” he said.