The man leading a crusade against counterfeit watches
In a murky and sometimes dangerous world where sophisticated criminals are creating high-end replica watches, one group is fighting back.Danae Mercer April 26, 2017
“Consumers looking for counterfeit products are like drug addicts,” says Michel Arnoux. “They know that it is illegal, bad, even dangerous but they still keep on buying.”
Arnoux would know. He’s been the Head of the Anti Counterfeiting Department within the Federation of the Swiss Watch Industry since 2000. In the world of counterfeit watches, he is like police officer, investigator and academic researcher rolled into one and is at the frontline of the daily battle against fakes. “I always worked in watchmaking,” he says. “So did my father. And my grandfather.”
When I met Arnoux at the Dubai Watch Week festival, he spoke of how counterfeiting isn’t a child’s game, and of how it extends far beyond consumers getting a brand name without paying big bucks. But the thing that stood out were his comments about the dangers associated with counterfeiting as organised crime networks play an ever-increasing role in the world of fakes.
“To make it short, due to the involvement of organised crime, our investigators are facing some difficulties on the field. This was not the case a few years ago. “The job,” Arnoux adds, “is getting more difficult.”
The counterfeit industry is massive. Exact numbers are hard to get – given the inherently unregulated, unreported nature of counterfeits – but the Organisation for Economic Cooperation and Development (OECD) estimates that counterfeit products account for around five to seven per cent of world trade. The value is estimated to exceed $250 billion. That’s without including digital or online copies.
While watches and jewellery aren’t the most often faked items (that title of distinction goes to textiles, such as a fake Gucci bag), some 40 million counterfeit watches are made every year. As for the number of original Swiss watches exported yearly? Around 26 million, suggested one statistic from 2008.
Some of these are what you think of when you think fakes: cheap, bought deliberately, the consumers knowing what they’re doing. But some of these are the exact opposite: you think you’re buying the real thing, just at a slightly better price. You pay hundreds. You lose hundreds.
“We are now faced with a new onslaught, which is getting bigger,” said Jon Omer, American Watch Association chairman. “We’re talking about pieces being sold in excess of $50,000 and $100,000 that are counterfeit watches.”
There are stories around this that both impress and horrify. Arnoux pointed to a counterfeit Hublot Big Bang tourbillon watch that Swiss customs officials seized. The watch seemed entirely authentic. But there were a few things wrong: a piece of plastic in the case that shouldn’t be there; a crystal that should have been non-reflective – tiny, minuscule faults.
“That was one of the first times I’ve held in my hand a fake tourbillon watch, a real high-precision mechanism,” Arnoux said. “The counterfeiters have now mastered ultra-complex movements.”
The counterfeiters haven’t just upped their watch game. They’ve also upped their crime credentials. Groups like the Mafia and Camorra in Europe and America, and the Triads and Yakuza in Asia are involved, notes a report by the United Nations Office on Drugs and Crime (UNODC). These groups have ‘diversified into the illicit trafficking of counterfeit goods,’ while staying involved in drug trafficking, human trafficking, extortion and money laundering.
In 2012, a Mexican drug cartel was caught with more than 1,000 faux Audemars Piguet watches at a Texas border crossing. In an effort to hide the fakes, they were mixed with 3,080 genuine models. These types of criminals get involved for the dough. Counterfeits can be more profitable than other illegal activities ‘such as the trafficking and sales of narcotic drugs, people and weapons,’ says the UNODC report.
When watches are sold as the real thing, it provides criminals with clean money. Counterfeit goods are also handy bartering chips. Instead of needing cold, hard cash, criminals can swap Cartiers or Omegas for drugs or weapons. The result? Less of a paper trail, and less risk of being found out. In some cases, profits are used to fuel terrorism.
It’s not just the top dogs in the crime world that are getting involved. Local gangs and smaller crime networks are part of it too. Los Angeles in particular has struggled with gang crime related to the manufacture and sale of counterfeit goods, notes America’s National Crime Prevention Council. ‘Where there is money to be made through illicit means,’ continues the UNODC report, ‘criminals will be attracted to it.’
Arnoux and the anti-counterfeiting group exist to fight the fakes. But his job isn’t just becoming more difficult, it’s also becoming more dangerous. The difficulty is tied to the internet. Thanks to technology, counterfeiters can ship single products to single buyers, making it far more difficult for custom officials to track. If someone walks through an airport with a box filled with luxury watches, that’s suspicious.
But if an individual sends a single watch through the post? Not so much. Throw in the fact that would-be buyers don’t have to trek to unsavoury locations for their pseudo-Breitling, and it’s a potent counterfeit market. The dangerous side is linked to the crime groups. If Arnoux’s department discovers fakes, in certain instances, it organises “seizure operations on an international scale with the aid of the appropriate authorities.” No longer are they handling a guy in a basement scratching letters onto a watch face. This is organised crime.
It is, he acknowledges, interesting to participate in police investigations. “Concluding a long investigation with a big seizure is satisfying,” he says. But in an environment where consumer demand is strong, where the internet connects everything, and where criminals have realised the power in counterfeits, Arnoux’s job isn’t getting any easier.
“It is very frustrating,” he sighs, “to realise that this is an endless pit.”