A  documented  member  of  the  Grape  Street  Crips  has  been  arrested  again  for  the sales  of  pirated  music  CDs.  Some  people  just  never  learn.  It  seems  the  lure  of  easy  money  is  just  too  hard  to  resist.

For 2013, Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and U.S. Customs and Border Protection (CBP) estimated the comprehensive results of counterfeit and pirated goods seized @ $1.74 Billion.(

In  2013,  we  saw  the  number  of  gang  members  involved  in  counterfeiting  and  piracy  grow  and  there  appears  to  be  no  end  in  sight  as  long  as  there  is  a  strong  demand  for  counterfeit  goods. Counterfeiting and piracy are not victimless crimes and do deserve to be prosecuted. The brand name companies are not the only victims in this illegal world. We all lose tax revenue and legitimate businesses lose sales to these criminals.

4-22-2014 10-56-57 AM


The Underground Economy

Kris Buc8067_IC_Kris-powerPoint_img_proof_150kner, President, Investigative Consultants                                                    

Statement before the Little Hoover Commission

23 JANUARY 2014

My name is Kris Buckner and I am the President of Investigative Consultants (IC). IC is a licensed private investigative company based in California that specializes in investigations related to trademark counterfeiting, piracy and other Intellectual Property matters. Our job is to investigate the manufacture, sales and distribution of illicit products on behalf of the brands we represent. IC is one of the nation’s leading investigative firms specializing in these types of cases and investigations.

I have been conducting these types of investigations for over 19 years and my company currently represents over 100 different brands, including some of the world’s largest and most famous brands, along with many smaller brands that are just starting to make an impact in the marketplace.

Our company represents all types of industries including pharmaceutical, consumer goods, electronics, luxury, tobacco, apparel, music, entertainment and many others in their efforts to protect their brands and consumers.

IC conducts training for law enforcement officers all over the United States and we have trained well over 10,000 officers in the methods of conducting counterfeiting and piracy investigations. In the past, our training classes have even been P.O.S.T. approved.

I founded Investigative Consultants in 1994. At that time, IC was a single person operation and over the past several years, we have grown tremendously. We now employ upwards of thirty fulltime employees that are focused solely on battling this ever growing problem of counterfeiting & piracy. The reason for our massive growth is because the problem of counterfeiting and piracy has grown substantially over the years and there are no indications that the problem is going away anytime soon.

The problem has grown and will continue to grow because these crimes are considered by criminals to be very low risk and very high reward. The criminals could not be more accurate in their assessment. This is like no other crime that I am aware of. You can make millions in illicit profits and face very little risk of serving any significant prison time.

Our team conducts investigations all over the state of California and on the internet. We have located counterfeit and pirated goods being sold in all types of establishments. There is no shortage of individuals or companies, who are engaging in the sales and distribution of counterfeit goods. The problem is a major issue for the state of California and the entire country as a whole.

The role of IC is to investigate on behalf of the brand owners we represent to uncover evidence of counterfeiting activities. If we develop solid evidence that some person or group is engaged in the counterfeit goods trade, we will provide the evidence developed to the appropriate law enforcement agency. In the course of law enforcement’s investigation, if counterfeit goods are seized, our company will assist law enforcement on behalf of the brand owner, in the identification, inventory and storage of the counterfeit items. In sum, we represent victim companies and assist law enforcement to ensure that counterfeiters are brought to justice.

We have worked on hundreds of cases with agencies ranging from The LAPD, The Los Angeles County Sheriff’s Department, The Sacramento County Sheriff’s Department, The Placer County Sheriff’s Department, The Riverside County District Attorney’s Office, The FBI, Homeland Security Investigations, The United States Secret Service, California Board of Equalization and many other outstanding agencies.

Our team has encountered difficulties in getting some local agencies involved in working these types of investigations due to budgetary issues or the overall lack of understanding how serious these crimes really are. Many of these cases cross county lines and quite often, the local agencies we are working with are unable to pursue the case into another jurisdiction.

Intellectual Property crimes and the other related crimes associated to the Underground Economy are leading to the Economic Undermining of America. I am very thankful that the commission is looking into the Underground Economy and its ties to Intellectual Property crimes, how it impacts the State of California and how we can better battle these issues.

The Underground Economy – The Current Landscape

Simply stated, the Underground Economy is out of control. Counterfeiting and piracy is just one aspect of the problem. In a study conducted by the Los Angeles Economic Development Corporation (LAEDC) on counterfeiting and piracy, the study showed that Los Angeles County lost 485 million dollars in lost tax revenue and 105,000 jobs in the year 2005 alone.

This study was focused solely on Los Angeles County, so imagine what the lost tax revenue is for the entire state of California. How many jobs is the state of California losing because of the Underground Economy? These numbers are staggering and I believe the problem is only getting worse.

Trademark Counterfeiting is not just limited to the latest designer purse or that high end luxury watch. Counterfeiters will counterfeit anything as long as they are making money and they do not care if anyone gets hurt or killed as long as cash is making it into their pockets.

We have seen cases involving counterfeit cancer medication, as well as other lifesaving pharmaceutical products. There are other cases involving counterfeit brake pads, aircraft parts, electronics, cough syrup, shampoo, bullet proof vests, and tobacco. The manufacturers of counterfeit products have no regard for the public’s health and safety.

Many people think counterfeiting is a victimless crime or its just some “big corporation” losing money. There is a lot more to it than most people realize. Many small legitimate businesses are also suffering, along with numerous other legitimate companies.

In my opinion, the general public has no appreciation for how many retail establishments are driven out of business every year by counterfeiters. As everyone knows, there is great demand for brand name products. How can a legitimate small retailer compete? Consumers are given the option of buying a pair of generic sunglasses for $20 from a legitimate store or going next door and buying a pair of brand name counterfeit sunglasses for the same price. Far too many consumers buy the counterfeit brand name sunglasses and the legitimate business ends up losing a sale.

I receive calls regularly from legitimate small business owners begging me to investigate their “counterfeit competitors.” These legitimate businesses know that they will be quickly driven out of business if the seller of counterfeit goods is allowed to continue to operate next door to them. The legitimate business owner understands that the consumer only has a limited amount of money to spend and if the money is spent on counterfeit goods, the legitimate business loses out.

Counterfeiting and Piracy is a large “cash cow” business. A majority of all transactions are done in cash and these operations rarely charge tax or even provide a receipt. I see this on a daily basis during our investigations, where subjects are selling counterfeit goods and requiring that all payments be made in cash. Many of the operations do not even have the required state and city licenses that are required to do business. The counterfeiters boast that they only accept cash because they do not want to pay taxes and do not want their funds to be traced.

During my 19 years of conducting these types of investigations, I have only come across one counterfeit organization that actually paid all their taxes and accounted for all their sales. This subject did not know it was a crime to sell counterfeit goods. Most of the other operations we see do not appear to be properly reporting their fair share of taxes.

I have interviewed several counterfeiters over the years and have been told time and time again that the counterfeit operations deal in huge sums of cash and that these organizations do not properly report their sales. I have also seen firsthand evidence of this. The counterfeiters advised me that they all take steps to “hide” their money, including wiring their money outside the United States or securing it in safety deposit boxes. The counterfeiters know that if they deposit the funds into a financial institution that they must make deposits under $10,000 and not conduct transactions that will raise the suspicions of banking officials. It has been made very clear to me that counterfeiters are well educated and know how to “play the game” to avoid detection by law enforcement.

We have seen evidence of large scale money laundering and structuring during our investigations, along with ties to other more serious crimes, such as narcotics sales, assaults, human trafficking, robbery, and weapons trafficking.

Organized Crime groups, Gangs and Terrorist Organizations have realized that the Underground Economy is a great way for them to make huge profits for their organizations and face less scrutiny by law enforcement if they were to engage in more traditional criminal activity known to be carried out by their groups. In the past several years, we have seen cases in California involving the 18th Street gang, MS 13, The Bloods, The Crips, Hezbollah and many others.

These groups of criminals know that they can engage in such crimes as trademark counterfeiting and piracy and make millions of dollars in the Underground Economy.

I have spent countless hours interviewing counterfeiters and I have always asked them why they became involved in counterfeiting and the answer is always basically the same, they can make huge amounts of money selling counterfeit goods and face very little risk of going to prison. They always say that the risk is worth the reward.

There are estimates that counterfeiting and piracy costs the global economy in the area of 500 Billion Dollars a year and that up to 8% of goods in the marketplace may be counterfeit. This is just one small aspect of the Underground Economy. It is only logical that California alone is suffering greatly because of the effects of the Underground Economy.

Sales of Counterfeit Goods in California

The sales of counterfeit goods are happening on a daily basis throughout the state. Whether you are at a local swap meet, Fisherman’s Wharf in San Francisco or Santee Alley in Los Angeles, you will find counterfeit goods being sold. Counterfeit goods are being sold in every type of venue you can think of.

You can visit the internet and find endless postings for counterfeit goods and individuals willing to meet you at your local coffee shop parking lot with a trunk full of the latest knock off headphones, jerseys, purses, jewelry, sunglasses or anything you want.

Counterfeiting has evolved in the past several years and we have seen a huge increase in online sales. Counterfeiters can now communicate and arrange their sales and purchasing through various social media outlets and websites.

Counterfeiters can be in instant contact with their suppliers in source countries outside the United States and arrange for counterfeit goods to be shipped to the USA in a matter of minutes. The counterfeit goods will be on a plane headed to the United States within hours of the order being placed. Some counterfeit operations are more efficiently organized than a fortune 500 business.

The reason why counterfeit sales are rampant is simple, the public’s thirst for a brand name item for a cheap price. The consumer demand for counterfeit goods is high and the general public does not understand what is truly behind counterfeiting and piracy.

Many of the counterfeit goods are manufactured outside the United States in countries that do not abide by the same laws as our country does. As a result of this, many of the counterfeit goods are made in factories that expose the workers to unsafe working conditions and in some instances employ child labor.

We need to educate the public about the Underground Economy and the negative impact these crimes have on our communities. The Los Angeles Crime Stoppers program has done an outstanding job to educate the public about counterfeiting and piracy. They have put up billboards and also produced numerous television segments about the issue. More educational efforts like this need to be done to stem the demand for counterfeit goods.

The criminals that are engaged in the Underground Economy are very well educated in the laws and know what exposure they face if they get caught. For instance, a subject that is selling unstamped cigarettes knows that he must get caught with thousands of cartons of unstamped cigarettes before he will face felony charges. The threshold to reach a felony standard is far too high and the perpetrators feel the risk is worth the reward. That is why law enforcement catches the same subjects time and time again being engaged in this activity.

Combatting the Problem in California

There are multiple agencies in the State of California that have done outstanding work to address the problem of counterfeiting and understand the importance of pursuing these cases. The Los Angeles County District Attorney’s Office has been aggressively prosecuting these crimes for several years and has done a great job. The Los Angeles County Sheriff’s Department and The LAPD have dedicated units that are tasked to investigate these crimes and are regularly serving search warrants, making arrests, and seizing large amounts of counterfeit goods. These agencies have done a great job with the limited resources they have been provided to address the problem.

The Riverside County District Attorney Office has a specialized prosecutor that is grant funded to prosecute these cases. This has led to an increase in cases being investigated and additional prosecutions with outstanding resolutions.

Law enforcement in the State of California has been on the forefront of investigating and prosecuting these crimes, however more needs to be done and law enforcement agencies need additional resources to properly attack the issues.

Many law enforcement agencies from around the world have looked to California law enforcement agencies for training when it comes to investigating counterfeiting and piracy matters.

The formation of the statewide taskforce to address the Underground Economy is an outstanding development. However, the taskforce must be properly funded and given all the needed resources in order for them to have the ability to dismantle the massive counterfeit operations that are operating throughout California.

The counterfeit trade is very similar to the drug trade. In order to be fully effective against the organizations, you must dismantle the entire organization. The lower level groups must be addressed along with the higher level subjects. The issue must be addressed from the ground up with a focused plan.

Agencies must coordinate their efforts to maximize their investigative and enforcement efforts.

Improvements needed

There are many additional things that need to be done to properly address the Underground Economy and Counterfeiting. The following items are suggested improvements:

  • Specialized Prosecutors
  • Legislative changes making it easier to seize illicit profits by local law enforcement
  • Mandatory fines to fund additional enforcement efforts
  • Legislative changes making the possession of over 100 cartons of cigarettes a felony
  • Increased Taskforce capabilities to operate throughout California
  • Grant funding for local agencies
  • Public Education and Awareness
  • Creation of a centralized database to track offenders

In order to properly fight the Underground Economy, we must remove the huge financial incentive that these criminals currently have. Law enforcement must have the ability and resources to investigate these cases and seize illicit profits and fruits of the crime. Convicted counterfeiters should have to pay mandatory fines that are used to fund law enforcement’s efforts to combat the Underground Economy.

Too often counterfeiters are arrested and convicted but are allowed to keep their illicit proceeds. In a recent case in Arizona, The Phoenix Police Department worked with the Maricopa County Attorney’s Office and seized over 2 million dollars in assets from a woman who was operating a website selling counterfeit coupons. The woman had made millions of dollars from operating a very simple website selling counterfeit coupons to unknowing consumer throughout the United States.

Many of these counterfeit operations are making millions of dollars off their illicit activity and the coupon case is just one example.

The Underground Economy is a serious threat to the State of California and must be hit head on. The economic stability of our state and country must be protected and should not be allowed to be undermined by those who chose to violate the law and steal from the citizens of California.



The common perception is “not much.” Well that’s not true. Those involved in intellectual property crimes, such as music piracy and the sales of counterfeit products can make huge amounts of money. Trademark law and other laws are designed to protect the rights of every person, who creates and innovates. In one music piracy case alone, the subject, who we will call “Angelica” was involved in what appeared to be the low level street sales of pirated music.

I remember myself feeling sorry for her thinking, well she is just trying to make a living and she seemed like such a nice lady. We all know “the ends do not justify the means” and intellectual property crimes hurt us all in so many ways. Angelica appeared to be so nice and unassuming. Well after being arrested a couple of times for selling pirated music on the streets of Los Angeles and being served with over 15 cease and desist notices, law enforcement served a search warrant at her house. Guess what? They found several thousand pirated music CDs, along with $ 40,000 in cash. The cops also found records that Angelica had over $ 700,000 cash in bank accounts and that she owned her $ 300,000 home outright. If that was not enough, turns out that she was on public assistance and obviously not paying her fair share of taxes. During the search, law enforcement also found information and evidence that Angelica was involved in loan sharking activities. This is one of many stories like this.

Guess what? “Angelica” was just arrested AGAIN on August 06, 2011 on piracy charges. I guess the money has just been too good for her to just walk away.

By Investigative Consultants


In 2010 and the first half of 2011, we saw a huge large increase in cases involving documented hard core gang members being involved in the sales and distribution of counterfeit and pirated goods. This trend appears to be growing and it appears that the answer why is very simple, low risk, high reward. The Los Angeles County Sheriff’s Department recently completed a trademark counterfeiting case involving an El Monte Flores gang member, who had previously been deported from the United States and has close ties to Le Eme. During this case, LASD seized over 2 million dollars worth of counterfeit merchandise, including shoes, perfumes, and sunglasses during their investigation.

The Los Angeles Police Department conducted multiple enforcement actions on a business called Now What Clothing in their Southeast Division. The location was being operated by the East Coast Crips. During the actions, LAPD recovered several handguns and 2 pounds of Marijuana, and a kilo of Methamphetamine. The Southeast Division of LAPD has also had other cases involving the Grape Street Crips and the 4 tray Crips. These cases have involved routine traffic stops and also the gangsters setting up retail stores. It appears that these stores are also being used as a front for the sales of guns and narcotics.

In LAPD’s Central Division, we have seen cases involving gang bangers from MS 13, 18th Street, 42nd Street Little Gangsters, Los Carnales and 36th Street. Most of these cases involved music piracy and luxury goods, such as handbags and sunglasses being sold in and around the Santee Alley area.

The LAPD’s Harbor Vice Unit arrested a Compton Crip, who was selling counterfeit shoes from the trunk of his car in front of a laundry mat. The gangster told law enforcement that he could make good money selling the counterfeit shoes and that no one was going to prison for it.

This is the gangster mentality when it comes to selling counterfeit merchandise. Remember, gangsters can make more money selling counterfeit goods than they can selling drugs. Intellectual property theft is growing everyday and gangsters understand that they can easily profit from what many people feel is a victimless crime. Counterfeiting and piracy hurt us all!

By Kris Buckner, Investigative Consultants



The Facts of IP Crimes

The Facts of IP Crimes

Kris Buckner, Investigative Consultants
The facts about Intellectual Property Crimes (IP Crimes) are really simple. IP Crimes, including trademark counterfeiting and piracy are an ever growing problem that endanger the foundation of our world and local economies. Not to mention that these crimes provide an easy source of revenue for gang members, organized crime groups, and even terrorist organizations. All of us and our communities are the victims in these types of crimes.

There is nothing positive that comes from the sales of counterfeit or pirated merchandise. In fact, everything about these crimes is negative. The people involved in the manufacturing, distribution, and sales of counterfeit trademarked merchandise are stealing. There is no difference than going into a store and taking merchandise without paying for it. The taking of someone’s intellectual property is theft, plain and simple.

The owners and creators of Intellectual Property are creative and innovative people who have worked hard to develop and create a product to share with the world. These creative minds spend years and thousands of their hard earned dollars to create and make their dreams come true. Why should a counterfeiter be allowed to come along and steal what someone else worked so hard on to create? Trademark counterfeiting is theft!

Too many people look at counterfeiting as a victimless crime and have the mentality that it is ok because “no one is getting hurt.” People are getting hurt and people are dying from counterfeit goods every year. There are numerous cases involving counterfeit goods that have resulted in hundreds of deaths. During the investigations that Investigative Consultants has conducted over the past 15 years, we have seen some very serious cases.

Counterfeiters have been known to use child labor in their production of the counterfeit goods. There have been cases where the workers making the counterfeit goods have been locked inside of factories. If there were a fire, the workers would have no way of escaping. The disregard that counterfeiters and pirates have for human life is amazing. The only thing the counterfeiters care about is the money and nothing else.

Our economy suffers in many ways. We are losing billions of dollars a year in lost tax revenue. Most counterfeiters are not paying their fair share of taxes, if any at all. There have been numerous cases where counterfeiters claim they make $ 12,000 a year, however have millions of dollars a year going through their bank accounts. The math never adds up.

During an investigation of a “street vendor” in Los Angeles, who sold pirated music, law enforcement obtained a search warrant for the vendor’s home. Law enforcement located over $ 40,000 in cash and $ 700,000 in bank accounts, along with several thousand pirated music CDs. Law enforcement also learned that the subject owned the home, valued at $ 330,000 outright. The problem is the subject was also collecting public assistance and did not pay taxes.

There have been numerous cases, where hundreds of thousands of dollars in cash have been recovered from the subjects of a counterfeiting investigation, who claim that they were “barely surviving” or they were just trying to “feed their kids.” Do not believe the tall tales that counterfeiters tell of poverty and “just getting by.” The counterfeiters are not legitimately contributing to our economy or to our communities.
In many cases, counterfeiters and pirates are paying their employees “under the table” and do not provide benefits or pay into Social Security or Workers Compensation. Counterfeiters will argue that they are creating jobs. However, aren’t all employees entitled to the protections that the law provides? When these workers are working for counterfeiters, they are often subjected to poor and dangerous working conditions. Most of these criminal organizations care nothing for the well being of the people working for them and are only concerned with their employees making them money.

How can legitimate small business owners compete with the businesses in their area selling counterfeit goods?

Gangs and Intellectual Property Crimes

Gangs & Intellectual Property Crimes

By Kris Buckner, Investigative Consultants

Trademark Counterfeiting, Piracy, and other Intellectual Property Crimes are the perfect types of crimes for gang members and organized crime groups to be involved in.

The answer why is very simple. These criminals face very low risk, however the rewards are extremely great. These crimes are all about the money. Most people do not realize the money that can be made by engaging in the theft of someone’s intellectual property. Intellectual property theft is estimated to be a 500 billion dollar a year problem.

Gang members and other criminals can make more money selling counterfeit goods than by committing robberies, selling dope, or carrying out their other normal street hustling crimes. Counterfeiters can make tens of thousands of dollars a month hawking their counterfeit shoes, handbags, or other assorted products.

It is amazing how much demand exists for counterfeit goods, so this creates the “Perfect Storm” for the gangsters to make big money. If the demand is there, someone will supply what the consumer wants. Whether it is drugs, counterfeit goods, or whatever else.

The gangsters face little risk of going to prison for trademark counterfeiting or piracy; however they are making money hand over fist selling counterfeit goods. They are making the same amount of money as if they were selling kilos of Cocaine.

Remember, if you get caught selling kilos of Cocaine, you are going to prison for years. So why sell kilos of Cocaine, when you can sell counterfeit goods and make just as much money and not risk going to prison for years?

Gang members take advantage of every aspect of Intellectual Property Crimes. In areas that have high concentrations of stores and street vendors, gang members have been known to “tax” the local vendors to allow them to sell their counterfeit goods. In one case in Los Angeles, two 18th Street Gang Members were arrested after shooting and killing a three week old child.

It was reported that the 18th Street gang members approached a vendor that was selling pirated DVD movies on the street. The vendor had his new born son with him. The gang members demanded that he pay them “tax” for selling the DVDs in their area. When the vendor refused, they shot at him. The bullet that was fired struck and killed his young son.

In another case, gang members suspected that a “fellow” seller of counterfeit items had “ratted” them out to law enforcement and reveled where they were getting their counterfeit merchandise. The gangsters chased the subject down and stabbed him multiple times, then they set him on fire and left him in the street to die.

The Los Angeles County Sheriff’s Department investigated a trademark counterfeiting case involving sunglasses, perfumes, and shoes. One of the subjects arrested turned out to be a previously deported El Monte Flores Gang member with a history of violence towards law enforcement. The subject’s father turned out to be a high ranking member of Le Eme, The Mexican Mafia. During the investigation, law enforcement seized over 2 million dollars worth of counterfeit goods.

There are many stories of hard core gang members and their associates becoming involved in trademark counterfeiting and piracy. There are documented cases involving the following gangs:

• MS-13
• 18TH Street
• East Coast Crips
• Grape Street Crips
• El Monte Flores
• 36th Street Gang
• Rough Riders
• 4 Trey Crips
• 42nd Street Little Gangsters
• Slauson Boys
• Compton Crips
• Raymond Street Crips
• Southside Montebello
• 190 East Coast Crips
• Los Carnales
• Compton Varrio 155
• Rolling 60’s
• Watergate Crips
• Skyline Pirus
• Hells Angels

The trademark counterfeiting and piracy laws are in place, however it is not often when counterfeiters are ever sentenced to lengthy prison terms. Until these gang members feel that counterfeiting is no longer worth the risk, they will continue to become deeply involved in trademark counterfeiting and piracy and reap large financial benefits.

Gang members are not stupid people, in fact they are very resourceful and creative. They are clearly learning that engaging in intellectual property theft can be very lucrative. In the past few years, there has been a dramatic increase in gang related trademark counterfeiting cases.

It is important to realize that Intellectual Property Crimes create a huge opportunity for the gangsters to make money to fund their other criminal activities, such as drug trafficking, extortion, identity theft, murders, human trafficking, and other serious and violent crimes.

The easy opportunity that these crimes create must be taken away from these serious criminals. The gangsters must not be allowed to engage in Intellectual Property Theft to benefit their violent criminal organizations.

To learn more about protecting intellectual property, visit
To report Counterfeiting or for more information please contact:


Another ATC Gang Member is Arrested for Piracy

The LAPD’s Piracy Unit has once again wrapped up another Alley Tiny Criminals (ATC) gang member on piracy charges. The subject, who was involved in manufacturing and distribution of pirated software is admitted member of the Alley Tiny Criminals gang.

The gangster was burning pirated software on his home computer and offering the software for sale on This is the second time in the past six months that the LAPD’s Piracy Unit has arrested an ATC gang member for selling pirated software through craigslist. They arrested the latest gang member just a few blocks from where the first ATC gang member was arrested.

Piracy and counterfeiting is becoming a growing trend amongst gangsters, turning away from selling drugs and guns for the “safer” and more profitable crimes, like counterfeiting or piracy.

The gang member admitted to detectives that he was making over $5,000 cash a month selling the pirated software. Not a bad business for this gang banger! I wonder if he was paying taxes on that money? It appears that the ATC gang has realized that the sales of counterfeit and pirated merchandise is a very lucrative business for the gang. Great work again by the Piracy Unit going after these gangsters!

Think piracy is a harmless crime? Think again!