toward the development of evidence-based anti-counterfeit ... · • abercrombie & fitch jeans...

© 2010 Michigan State University Board of Trustees

Toward the Development of Evidence-Based Anti-Counterfeit Strategy for the

Bearings Industry

Jeremy M. Wilson

October 7, 2010

© 2010 Michigan State University Board of Trustees1010 Michigan State University Board of Trustees

• MSU as the intellectual hub of anti-counterfeit strategy

• The A-CAPPP’s evidence-based approach

• The value of analysis

• How the A-CAPPP is informing decision-making

• Examples of how the A-CAPPP can assist ABMA

• Potential opportunities for ABMA-A-CAPPP partnerships

Agenda








Agenda


MSU: The Intellectual Hub of Anti-Counterfeiting Strategy

• Despite the staggering impact of counterfeiting, virtually no scientific leadership exists to guide the response

• Interdisciplinary expertise, a practical, collaborative approach, and a renowned international reputation led industry to seek out MSU to establish and lead the discipline

• University rallied to launch A-CAPPP

• Our goal is to become the trusted partner and resource for industry, government, and academic translational research and guidance

– We aim to inform decision-making at all levels


What Makes MSU Unique?• Independent and objective

• Analytical and evidence-based “Safe Space”

• Non-profit with mission to inform

• Breadth and depth of a world-renowned research university

Criminal Justice

Engineering

Consumer Behavior

Public Health

Law

Business

Packaging

SupplyChain


Education

Outreach

Research

The A-CAPPP is Multi-Dimensional








Agenda


Established Tenets of Crime Prevention Theory Guide Our Thinking

• The first component is problem-solving

– Data should guide analysis of specific problems

– Responses are evidence-based and tailored to the problem

• “SARA” is key to problem-solving

– SARA is a systematic process for examining all relevant data related to a recurring problem

Scanning AssessmentResponseAnalysis


Established Tenets of Crime Prevention Theory Guide Our Thinking

• The second component is the crime triangle

– The crime triangle identifies the basic elements that comprise any problem

• We must analyze and understand these elements in order to solve problems

Source: Center for Problem-Oriented Policing


SARA and the Triangle are Linked

Scanning AssessmentResponseAnalysis

We must obtain data and conduct analyses that relate to the crime triangle


• Increasing the effort the offender must make to carry out the crime

• Increasing the risks the offender must face in completing the crime

• Reducing the rewards or benefits the offender expects to obtain from the crime

• Removing excuses that offenders may use to “rationalize” or justify their actions

• Reducing or avoiding provocations that may tempt or incite offenders into criminal acts

Situational Crime Prevention Provides Techniques to Reduce Crime Opportunities


Problem-Solving Has Proven Successful in Addressing Other Forms of Crime

• Youth homicides – The Boston Gun Project

– 63% reduction in homicides

– 32% reduction in shots-fired calls

– 25% reduction in gun assaults

– 44% reduction in youth gun assaults

• Burglaries at apartment complexes

• Thefts at construction sites

• Street prostitution

• Graffiti

• Vehicle burglary

• Overt drug markets


So What Does This Framework Tell Us?

• Problems must be specifically and accurately defined

• The process must be data-driven

• The solution must be focused

• Assessment must be ongoing

These principles can and should be applied to product counterfeiting








Agenda


Research and AnalysisImproves Understanding of a Problem and

Shapes Discourse


Research and AnalysisHelps to Create Solutions to Problems


Research and AnalysisDetermines If and How Strategies are Effective


Research and AnalysisCreates and Facilitates Promising Practices


Research and AnalysisInforms Resource Allocation








Agenda


Drawing on a Promising Approach—The Extremist Crime Database

• Open source domestic terrorism database

• Includes violent and financial crimes committed by members of far right, far left, and Al Qaeda (1990-2008)

• Includes incident, victim, suspect and group information—all collected from open sources


The Database Illustrates the Usefulness of Open-Source Data to Inform Decision-Making

• Developed/refined domestic terrorism training curriculum

• Consulted with law enforcement to better assess risk priorities

• Helped to develop proactive and reactive responses to extremist groups

• Indicated types of information that should be collected and shared

• Briefings and partnerships requested by US House of Representatives, DHS, CIA, FBI, Secret Service, and the National Consortium for the Study of Terrorism and Responses to Terrorism

• Analyses have led to multiple grant awards, research publications, policy memoranda, and student dissertations


The A-CAPPP Product CounterfeitingIncident Database

• All US-related cases since 2000

• Drawing from open sources

• We have identified 800+ cases thus far—the search continues

• Cases involve various products from several industry sectors, but we have started with those pertaining to pharmaceuticals

This is the first empirical, open-source database constructed to develop evidence-based policy

lessons on product counterfeiting


The Database Aids Problem Solving

Example: A counterfeit pharmaceutical case

Iggy Prints

Albers Medical Distributors

H.D. Smith Wholesale Drugs

Jackson Memorial Hospital

Cardinal HealthFDA

Miami-Dade PD

Florida Department of Health

Broward County State Attorney

Florida Department of Law Enforcement

Florida’s Bureau of Statewide Pharmaceutical Services

New York Attorney General

19 individuals across several states

Hundreds of elderly patients and Medicaid users

Likely contributed to the deaths of some cancer and AIDS patients (Chief of FDLE)


The Database Aids Problem Solving

• We can identify the factors that contribute to the problem

• We can identify problem “controllers” (e.g., guardians)

• Knowledge of the process informs the intervention—prevention, detection, investigation, and response

• For longer-term research opportunities, the database also allows

– Systematic risk assessment (products, offenders, victims, contexts, etc.) to drive risk governance and communication

– Ongoing monitoring and evaluation


The Database Employs a SystematicThree-Step Process

• ONE: Identifying incidents

• TWO: Searching open-sources

• THREE: Coding open-source information


Our Process is Working: Rx Incidents

Case identification

- Over 3,100 sources identified and scanned

Open source search

Coding

- Identified 568 incidents for all products

- Another 253 incidents to cross-check and add

- 75 Rx incidents from initial sample (568)

- 64 new Rx cases found in search files so far- 30 more search files to scan for new cases

- Cancer/AIDS Rx case: 354 pages

- Botox case: 72 pages

- Online Rx case: 122 pages

- Blood glucose strips case: 70 pages


We Have Information On Seizures by Quantity, Dollar Value, and Agency

• Ford auto parts

– $700K worth of brake pads, tail lights, ignition coils, water pumps, etc.; NYPD made arrests Dec. 2009; defendants charged with Trademark Counterfeiting and face up to 15 years

• Gucci shoes

– 15K pairs; retail value $3.8M; CBP in Norfolk, VA

• Women’s sunglasses

– Over 43K pairs; retail value $7.9M; CBP in Los Angeles, CA

• Luxury handbags, clothing, accessories

– Over 1,600 items; domestic value over $1M; ICE in Denver, CO

• Abercrombie & Fitch jeans

– Over 14K pairs; retail value $1.1M; CBP in Norfolk, VA

• NFL merchandise: About 2,500 jerseys/shirts; retail value over $300K; ICE, Phoenix PD and Glendale PD in Glendale, AZ

We can learn about the discovery and scope of product counterfeiting from seizure data


• Baby formula

– FDA investigated and assisted by The Royal Canadian Mounted Police

– Detailed information on arrest, conviction and sentencing for two offenders

• Soft drinks/water

– Trademark holder granted injunction and award of damages

• Misbranded mineral water

– Investigated by IRS and FDA

– Detailed information about indictment, search warrants, conviction and sentencing

• Adulterated seafood

– Investigated by National Oceanic and Atmospheric Administration Office of Law Enforcement; DHS; ICE; US Air Force; DOD

– Detailed information on indictment and trial date

• Adulterated caviar

– Investigated by US Fish and Wildlife Service, DHS and ICE

– Detailed information about sentencing and fines

We Also have Information On Investigationand Case Outcome


We have Information On Investigation and Case Outcome –An Example Timeline

• Adulterated deer meat investigated by Indiana Department of

Natural Resources and FDA

– Detailed information on conviction, sentencing and criminal

fines for two offenders

FEB 2004: Indiana Dept.

of Natural Resources contacts FDA for

investigative assistance

MAY 2005: Offender B sentenced 1 year

incarceration, 2 years supervised

release, over $500K in fines

JUL 2004: Offender A and B

indicted on 38 offenses each

DEC 2004: Offender A convicted after 8-day

trial

JAN 2005: Offender B

convicted after 8-day trial

APR 2005: Offender A

sentenced 1 year probation and $3K fine

We can learn how product counterfeiting cases are processed in the criminal justice system


We Have Identified Cases Linked to International Organized Crime

• Asian organized crime

– ICE’s “Operation Panda” in 2003

– Targeted 5 groups in NYC’s Chinatown areas

– Loosely partnered to support various illicit activities

– In 2004, 51 people charged with racketeering, attempted murder, alien smuggling, money laundering and illegal gambling

• Also charged with trafficking in counterfeit goods

• $4 million in counterfeited luxury goods seized

• In a potentially related case, the leader of New York’s “Lim Organization” was sentenced to 151 months for attempted murder and illegal gambling

– Court records also cited his group’s involvement in trafficking in counterfeit goods from 2002 to 2004


We Have Identified Cases Linkedto Terrorist Groups

• In 2006, 19 individuals in Detroit charged with operating a racketeering enterprise

– Counterfeit Viagra

– Counterfeit “Zig-Zag” cigarette papers

• Estimated value of $16 million

– Counterfeit cigarette tax stamps

• Court records indicate profits went to Hezbollah

• Several involved have been convicted or pled guilty

– Ordered to pay restitution to trademark holders

– Will be removed from US after serving prison sentences


Our Data Articulate the Nature of Product Counterfeiting Risk and Formal Responses

• The scope of the problem within and across industries

• The basic elements and processes of the problem—the “chemistry of the crime”

• How the criminal justice system processes the problem

– The agencies that discover it

– The agencies that investigate it

– Case outcomes


• In the infancy stage, our data collection already provides rich information

• The open-source approach holds promise for informing policy, practice, and decision-making by providing evidence that aids problem-solving

• By articulating process, participants, and other features we can identify points of intervention

• Proven tenets of crime prevention theory can guide the substance and goals of interventions

What Does This Tell Us So Far?


We’re Also Developing, Testing, and Evaluating Innovations and Programs (1)

• Biosensors that rapidly detect non-specific chemical and biological contaminants

– Is food good or bad?

• Covert DNA markings, taggants (multicolored nanoparticles added to a product), and tracers (inert chemical compounds) recognized only by manufacturers

• Sensor systems that engage in dynamic behavior only when directly stimulated by a user

These technologies increase offenders’ risk of apprehension and decrease harm to victims


We’re Also Developing, Testing, and Evaluating Innovations and Programs (2)

• Development of industry and company risk assessment tools

– Planning and reviewing scenarios

– Prioritizing corporate-wide risks

– Assessing product-specific counterfeiting risk

– Communication of risk and countermeasures

– Implications for “target hardening”

• Review of the Nigerian 2010 Anti-Counterfeiting and Substandard Program

– Lessons for enhancing specific forms of guardians

Other innovations will be developed and tested as we “learn” about product counterfeiting


Other Projects Aim at Addressing the Crime Triangle (1)

• Multi-client studies/mini-conference

– Originally conceived as a quick analysis of an industry-defined problem to help shape immediate decisions

– Used to fill the “donut hole of research”

– Clients engage experts and learn from analysis prior to publication

– Recent topic was the “Role of consumers in product authentication”

• Increase crime effort by enabling potential victims

– Planning: Economically-motivated adulteration


Other Projects Aim at Addressing the Crime Triangle (2)

• Estimating the return on investment for pharmaceutical counterfeiting

– Examining the ease and attractiveness of offending

• Counterfeiting and terrorist financing

– Identify attributes of offenders and their handlers

• Counterfeiting case studies (with the FBI)

– Understand characteristics and roles of offenders, places, guardians, and controllers

• Federal enforcement of product counterfeiting violations

– Increase apprehension risk and crime effort by improving guardianship


Other Projects Focus on Landscaping and Forecasting

• Economic impact of counterfeiting

• Product counterfeiting in Australia

• Product counterfeit sales, interventions, and displacement on the internet

• Review of the current state of counterfeiting and moving forward


• Packaging: innovations to increase risk

• Engineering: data mining and modeling to connect crime triangle elements

• Law: governance of intellectual property rights to enhance controllers

• Supply-chain: tightening distribution to increase risk and effort

• Communications: vigilance-increasing strategies to increase risk and effort; message tailoring

• Public health: create risk models and response strategies to increase effort and reduce harm

We’re Looking to Develop New Areas








Agenda


• Articulate the risk and place it in context—internally and externally

– Extent and form of threat

– Existence of vulnerabilities

– Assessment of consequences

Research and Analysis Can Help ABMA and Its Members—Collectively and Individually

Threat

Vulnerability Consequences

Risk



• Development of evidence-based anti-counterfeit strategy to mitigate risk

– Formulate strategies

– Assess factors that facilitate and impede strategies

– Evaluate cost and effectiveness of strategies




• Development of evidence-based anti-counterfeit strategy to mitigate risk

• Inform resource allocation

• Identify promising practices and emerging trends



• Provide safe space for information sharing and learning

• Leverage partnerships with other industries, government agencies, and associations

• Train and educate staff to improve decision-making

Education Can Help ABMA and Its Members—Collectively and Individually








Agenda


• Use publicly available information to chart the landscape of counterfeit risk to the bearings industry

• Raise awareness and shape discourse

• Serve as a reference source

• Products: briefings, webinar, A-CAPPP Paper, and trade article

A “Quick-Look” Industry Risk Assessment


• Individually and collectively examine the extent to which and how bearings manufacturers are

– Exposed to risk

– Assess risk

– Respond to risk

• Develop promising practices to mitigate risks based on organizational case studies

– Collection and analysis of primary and secondary data

• Manufacturers remain anonymous

• Products: briefings, A-CAPPP Paper, and journal article

An In-depth Organizational Risk Assessment


• Construction of open- or closed-source counterfeit bearings database for use by ABMA and the A-CAPPP

• Development of empirical lessons on

– The chemistry of the crime

– The nature of the risk

– Intervention strategies for prevention, detection, investigation, and response

– Ongoing trends within and among industries

• Products: ongoing briefings, webinars, A-CAPPP Papers, and trade and journal articles

Long-Term, Data-Driven Anti-Counterfeit Capacity Building


• Increase awareness of product counterfeiting and mitigation strategies through training and peer-to-peer discussion

• Choice of location

– On-campus

– On-site

– Prior or subsequent to a conference/meeting

• Choice of participants

– By company

– By industry

– By position

Executive Education “On Demand”

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