Tuesday, June 25, 2024

Latest NC crackdown on counterfeit goods includes $170K in THC-infused snacks

Secretary of State Elaine Marshall gave a press briefing on an anti-counterfeit law enforcement operation at the New Hanover County Sheriff’s Office on Tuesday. (Port City Daily/Peter Castagno)

NEW HANOVER COUNTY — The most recent episode in a statewide effort to crack down on counterfeit goods distribution has made its way to the greater Wilmington area.

New Hanover County Sheriff’s Office and North Carolina Secretary of State Elaine Marshall announced Tuesday illicit activity was taking place at numerous vape and tobacco shops in North Carolina, as well as the EZ Mart, located at 1619 Castle Hayne Road. 

Law enforcement seized roughly $170,000 in counterfeit items confiscated on Oct. 18. Marshall said the operation included eight search warrants and 24 consent searches, in which the individual being investigated gives voluntary consent. Since the investigation is ongoing, the specifics of the other shops involved and breakdown of the value of confiscated goods from each shop was not provided.

“Counterfeit products continue to be a nationwide issue and a nationwide enforcement priority,” Marshall said at a press briefing. “The effects keep coming and they pose a very real danger to our innovation-based economy and the countless jobs that are based upon that economy, as well as the health and safety of consumers.”

The counterfeit brands included Lucky Charms, Skittles, Airheads, Ruffles, Fritos, Apple, Red Bull, and Oreos. In addition to the counterfeit-branded edibles and items, authorities seized weapons and drugs from the suspects including 1,500 grams of marijuana and 60 psilocybin chocolate bars.

Two individuals have been charged with felony marijuana and schedule 1 related narcotics offense; Mohammad Ahmad Darwich, whose family owns the business, and his employee, Melinda Lee Greenleaf.

The suspects were not felons and the seized weapons — which NHCSO Lt. Brewer said included three rifles and two pistols — were not stolen. The sheriff’s office is consulting with the Bureau of Alcohol, Tobacco, Firearms, and Explosives about potential weapons charges.

The coordinated enforcement effort included the secretary of state’s office, trademark law enforcement agents, local authorities, and the North Carolina Anti-Counterfeiting Task Force. Sheriff Ed McMahon said the county reached out to the state for assistance after receiving complaints about the EZ Mart convenience store.

In addition to New Hanover County, secretary of state agents coordinated with police departments in Bridgeton, Edenton, Kinston, Scotland Neck, Tarboro, Wallace, Williamston and N.C. Central University, as well as sheriff offices in Craven, Duplin, Durham, and Lenoir counties.

The secretary of state said the investigation is ongoing and there are possible related pending charges in other counties as well.

An undercover agent, whose anonymity must be maintained in the ongoing investigation, told Port City Daily the operation included the seizure of counterfeit-brand edibles from one business owner in Pender County. The agent said “three or four” stores in Burgaw and Rocky Point sold the products, for which the owner was given a formal warning.

Secretary of state spokesperson Liz Proctor told Port City Daily business owners are often given a warning for their first offense of selling counterfeit goods if there is no proof of intent.

Marshall warned the edibles are particularly threatening to children; a study using national poison control data found cannabis edible poisonings in children under 6 increased 1,375% from 2017 to 2021.  

“While the packaging of the THC edibles include markings indicating the snacks include THC, these markings are easily overlooked by children,” she said. “As you can see the packaging is meant to look like regular food, candy, chips, and other snacks. Many times with a cartoon character or other images that are appealing to young children or teenagers.”

Marshall said parents should take precautions to ensure their children do not ingest edibles under counterfeit brand names.

“Check their backpacks, check their bedrooms, whatever you do to keep your child safe,” Marshall said.

The items also included a counterfeit version of FreshLook Colorblends eye contacts. The U.S. Immigration and Customs Enforcement Agency has warned counterfeit eye contacts have caused blindness and other vision problems in the past.

“The problem with them is they’re not manufactured under sanitary conditions and they’re not as fine as they would need to be,” she said.

Proctor told Port City Daily counterfeit Christmas lights — which presents a safety hazard — will likely be revealed by investigators in coming weeks.

The state works with safety science company Underwriters Laboratories to help determine which goods are counterfeit, according to deputy secretary of communications Tom Crowley. He explained Christmas lights’ extension cords have a “fake UL sticker” on them, to make it seem more legitimate.

Marshall said she believed China was a common source of counterfeit consumer products. Her claim was corroborated by Crowley, who told Port City Daily China has weaker enforcement of IP laws than the U.S.

“I highly suspect these are manufactured in another country that doesn’t care about our trademark laws,” Marshall said.

Chinese counterfeit goods are often transshipped to South American countries including Paraguay before arriving in the U.S., Marshall explained. She also said counterfeit goods suppliers in Eastern Europe ship through a northern route in Canada.

“In the long run we’re trying to find suppliers, which is a much more difficult process,” Crowley told Port City Daily.

Intellectual property prosecutor Michael Putnam told Port City Daily North Carolina is a major spot for counterfeit goods because it is conveniently located between East Coast distributors in Florida, New York, South Carolina, and Georgia.

Other notable busts in the state include $224,000 in THC-infused counterfeit snacks and gummies sold under counterfeit brands in Asheville in 2022 and $800,000 in counterfeit items seized in the Fayetteville area in 2019.

“We’ve got major interstate corridors. We’ve got a growing population. I mean everything that’s good and right about North Carolina that brings people here brings crooks,” Marshall said. 

She has been North Carolina’s secretary of state since 1997 and founded the N.C. Secretary of State Anti-Counterfeiting Task Force in 2004. She said the task force has been involved in more than 7,500 cases and seizing more than $190 million in counterfeit goods.

Michigan State’s Center for Anti-Counterfeiting and Product Protection awarded Marshall its Brand Protection Hero Award in 2019, highlighting her role in expanding the task force from 10 members in 2004 to over 100 today. She also helped with the biggest bust in the task force’s history — $24.4 million in fake Cartier bracelets found in Chapel Hill.

Marshall has more law enforcement authority than secretary of state positions in other states, she added.

“A lot of others just do elections and file corporations. I don’t have anything to do with conducting elections and registering voters,” she said.

She said she believes North Carolina takes stronger punitive action on counterfeiting than other states to discourage offenders.

“I’m a firm believer that if I have a law, I need to enforce it,” she said. “If not, they need to repeal the law if they’re not going to do anything about it.”

Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.

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