Spotting Funny Money

Catch 'Em If You Can!

Authentication by Surface Analysis

"Below, is an article that references a new application of surface analysis authentication device. This type of technology, although in its infancy, is used in the pharmaceutical industry. It implements the concept of verifying the authenticity of a single, unique package, document, product, etc. by mapping microscopic textural fingerprints that are absolutely unique in nature due to inconsistencies in the manufacturing process. For example, take a look at this knife blade under high magnification:

All of those little etches on the knife edge are unique to each blade. These surface analysis technologies are able to distinguish one unique item from another, which makes them great for authentication. Expect to see creative applications for this type of technology in the near future!"

----------------------------------------------------------------------------

Here's the article>>

Marlborough, Mass. A new magneto-optical visualization technology is helping US law enforcement agencies detect altered vehicle identification numbers (VIN) quickly and easily.

According to Document Forensics, the sole US distributor of this technology, magneto-optical visualization, or MOV as it’s known, can “see” through VIN tags located on car dashboards and detect any alterations caused by physical and chemical etching or other forms of metal-working.

A family of products under the brand name Complex utilize MOV to help law enforcement officers and transportation officials examine surface relief of homogeneous metals with magnetic characteristics to detect traces of metal-working, integrated non-ferromagnetic materials, surface defects of weld seams. The non-destructive method does not require removing lacquer-and-paint coating or layers of corrosion.

Data management software, called VideoScope, when used with Complex verification systems enables the data gathered from VIN tag inspection to be processed, analyzed, and stored for easy retrieval by criminal laboratories, law enforcement agencies, judicial departments, customs, and insurance companies. Additional Complex components enable officials to quickly determine authenticity of accompanying vehicle documents and forms.

Document Forensics offers a complete line of document authentication devices and systems designed to help local, state, and federal law enforcement agencies and private firms spot and combat document forgeries, identity theft, and illegal entry. For more information or to schedule a demonstration visit www.docverification.com.

ARMark at Graphics of the Americas

Senegal: Problems With Piracy

Counterfeiting and piracy is a major problem on a world-wide scale. It involves the unauthorized replication and sale of brand name products and generally impacts countries across the board. It can be detrimental to societies by devaluing otherwise authentic products, decreasing consumer’s trust and creating health risks to name a few. Generally, counterfeiting and piracy tends to arise under certain societal factors that are conducive to such crimes. These factors include but are not limited to: poverty, lack of regulation, corruption, cultural values and lack of access to certain resources. Although Senegal is fairly well-off, compared to some other African countries, it does show traces of each of these factors in its society.

As with any cases of counterfeiting and piracy, we must first ask; why is this happening? As previously mentioned, there are many things that can create an atmosphere that is conducive to such crimes, which can make them difficult to detect, but Senegal shows signs that are quite apparent, although difficult to rectify. The first factor that is evident is Senegal’s high cost of living, coupled with a low salary scale, nation-wide. This dangerous combination puts an economic and social stress on citizens, often driving them to conduct in activities they normally wouldn’t. This isn’t to say that due to its tight economic situation, the people of Senegal all resort to counterfeiting and piracy but, perhaps they do reconsider buying the less expensive fake over the real deal. In many cases, this alone would be enough to encourage ‘black markets’, but the same pressures that apply to the masses also apply to the country’s officials. They too have an extremely high standard of living, especially being in the public eye and they do whatever it takes to ensure their keep their lifestyles … even tap into public funds to finance their own personal activities.

This then leads to the next major factor in Senegal’s counterfeiting and piracy problem; corruption. As you can imagine, there is not much money going around as it is, so when officials irresponsibly use that money to their benefit, it definitely impacts the economy. Furthermore, there are cases of Senegalese officials taking bribes and conducting in illegal activities themselves. One popular trend, that directly impacts the counterfeiting and piracy problem, is the redistribution of already seized goods. In other words, certain corrupt officials are taking inventory from a police seizure of counterfeit products and are selling them to vendors to redistribute back into the society. This is one factor that should be relatively easy to control, as it is occurring where the problem should be enforced. Obviously, this does not help Senegal’s problem whatsoever. In fact, it merely sets a poor example and sends the message that it is OK to conduct in the sale or purchase of counterfeit goods. There aren’t even enough resources to properly enforce the trafficking that is already occurring among civilians, let along officials. To make matters worse, on top of having limited resources, Senegal also has a limited regulatory system. As it is still a developing country, Senegal hasn’t yet refined its intellectual property laws, and copyright or trademark infringement isn’t seen as a punishable crime. Such cases very rarely make it to court, and when they do, the judiciary system delivers inconsistent and non-transparent decisions. At the heart of these issues; Senegal simply doesn’t have the budget to pursuit such crimes, and so they are not dealt with. If the money was more readily available, this would be the obvious place to start, as no progress can be made to thwart counterfeiting and piracy without regulatory provisions.

Although political and economic factors are generally seen as the most evident contributors to counterfeiting and piracy problems, in Senegal, the general consumer opinion is also largely to blame. This doesn’t mean that the consumers; themselves are to blame, but rather the standards of purchasing within the Senegalese society is. First, it is important to realize that in Senegal, image and status are everything. My Senegalese contact, Janet Cole confirmed that she and everyone she knows spend a significant amount of time and money on her image. In fact, she was shocked at how unorthodox our credit system was, stating, “You spend what you have! At most women will put a down payment on clothing, so that they can wear it and work to pay it off.” Even the fact that people will put a down payment on clothing to merely wear them without owning them says a lot about the desperation to achieve the desired image, despite economic hardship. In many cases, such people do resort to purchasing ‘knock-off’ goods, whether imitations made with fake materials, or previously confiscated redistributed goods. In addition, the major religion of Senegal plays a role too. As a predominantly Muslim society, to improve one’s image, for men this means marrying many women. While having a lot of wives conveys a certain desirable social status, it also means there are many more expenses associated. For women, this means marrying an established Muslim man to provide for her. Otherwise, the social security only provides a mere $5 per quarter (or three months), which is near impossible to live off of, especially if you want to have an education.

Education is valued extremely heavily in Senegal, and in fact, they have some exceptional private schools, if you can afford them. For those who are less fortunate, which includes most of the people, they are lucky to even attend a public school, which are usually hurt by political corruption. Janet also had some incite to this as well, saying, “if a family wants their children to be educated, in many cases, they send the children to urban areas and say, ‘don’t come back until you have $5.’” That is the extent of desperation when it comes to money and education. It also contributes to the counterfeiting and piracy numbers, as those children will pursuit any means necessary to make that $5, otherwise they aren’t going home. So, as a quick, easy alternative to arduous labor, they will often conduct in some aspect of a counterfeiting, piracy or trafficking operation. This not only directly impacts the economic numbers, but also demonstrates to the youth that such illegal activities can have a high reward, compared to a low risk.

It is this balance of high reward and low risk that regulates such a strong system of counterfeiting and piracy. Products that enter Senegal from China, Nigeria, Dubai and other major trade affiliates are not screened adequately enough, and many unauthorized goods slip through. Although, on a positive note, the Senegalese Customs Office is aware of such weaknesses, and has begun participating in training sessions to help them spot counterfeit and pirated goods. Even president Abdoulaye Wade acknowledges the problem, and has intentions to establish a National Assembly to specialize in handing piracy throughout the country. Senegal has also joined an organization called; African Organization of Intellectual Property, or OAPI, which is a collection of other African countries that works to implement a universal system for securing property rights. Strides such as this is exactly what Senegal needs to crack-down on its counterfeiting and piracy problems.

Considering the fact that Senegal is still a developing country, it is to be expected that there is a certain degree of counterfeiting, piracy and trafficking that occurs. With that being said, it certainly doesn’t help that corruption and lacking regulations exist to the extent that they do. This, coupled with the previously examined social and economic factors fuel a fire that is difficult to put out. However; overall, Senegal’s recent progress with regard to improving regulations, training customs inspectors and joining collective efforts demonstrates hope for future reform and containment.

Components of Counterfeiting

Counterfeiting has been evident in our world for thousands of years, dating back to medieval times, but why is it such a prevalent problem? This could be due to the fact that in general, counterfeiting is seen by societies around the world as a crime that merely provides alternative quality products to buyers in a manner that is unjustifiable referred to as, “victimless.” In many cases the reality is that counterfeit products and documents actually are quite damaging. Not only is the damage seen in terms of brand trust and protection, but more importantly, it is widely seen in terms of safety and security. In addition to this skewed perception about the actual impact of counterfeiting, there is simply not enough legislation or regulation and criminals see getting caught is a low risk compared to potential profits. In order to better understand the complex system of counterfeiting, we will examine some of the components of this trade, particularly the trends that occur and the impact it has on our societies.

Many experts believe that this societal phenomenon originated in medieval France, with the counterfeiting of bread. At the time, the king was in charge of legally mandating a regulated recipe for bread in a given month. Due to the lack of abundant crop ingredients (i.e. wheat, oats, etc.), the legal kingdom-wide recipe for bread was determined by the supply of crops. In order to regulate such a law, the king would license certain bakers to be the official bread provides, in accordance with the particular recipes. As a result, there was a high demand for bread and a low supply, only coming from a few bakers. Before too long, counterfeiters emerged, producing their own recipe of bread- fraudulently marked with the king’s insignia to pass inspections. Although this example is quite outdated, it tends to mirror the emergence of any counterfeit product. Whether it is a designer bag, a Rolex knockoff, or even a prescription drug, counterfeit products generally enter the market due to a high demand and low supply. This is why we generally see otherwise expensive, well-known brand names being replicated. Simply put, if you want to convey the image of an economically sound person by using certain brand products, such as a Rolex watch, but you can’t actually afford the real thing, then why not buy a $20 fake on the side of the street if no one can really tell the difference? At first glance, you might not think that such a purchase can do any harm, but there are untold amounts of repercussions. What if I changed the scenario up a bit and added that your $20 would eventually wind up in the hands of global terrorists…would you still buy the watch? How about if you knew that that knockoff watch was made by child slave laborers? Organized crime units cut any corners possible to maximize their profits and with over 66% of world-wide counterfeit goods coming from Asia, particularly China; it is often the case that extreme minors are doing the counterfeit assembly. You can already start to see how that little side-street purchase can have a ripple effect on the other side of the world, and we didn’t even mention how it hurts the brand-holding company.

Intellectual property crimes or IP crimes consistently cost businesses and the public literally hundreds of billions of dollars every year. In fact, some estimate annual global losses due to counterfeiting to be between 500 and 600 billion US dollars! Now, you might be saying to yourself, that’s nothing compared to our national deficit, but think about the implications of such a loss to businesses world-wide. The amount of jobs that could be created with that lost money, alone could drastically affect unemployment numbers. In addition, many companies spend a tremendous amount of money on brand protection, sometimes accounting for one-fifth of revenues. Without anti-counterfeiting expenses, products could be produces for much less, ultimately making them more affordable for the public. Furthermore, since counterfeit goods are usually smuggled or cleared with forged documentation, they often escape any taxation; so clearly the counterfeit market has a great impact on economies: nationally, internationally and in terms of business operations. However, businesses aren’t only hurt financially by counterfeit products, there are many non-monetary damages. In particular, counterfeiting can really hurt a company’s brand trust and image. In the example of the Rolex watch, it is well-known that you can get a cheaper version, undetected by the untrained eye. So, rather than going directly to a Rolex outlet and spending thousands of dollars, the consumer might be inclined to pull a fast one and get a knockoff. This seems like it is another case of economic impact, but what if these Rolex knockoffs become so prevalent in our society that when you see someone wearing one, you automatically assume it’s a fake? In that case, why would anyone want to own a Rolex to convey their economic status, if it merely indicates that they support the purchase of counterfeit goods? Without doing anything wrong, you can see how the Rolex Corporation could easily evolve from a luxury status symbol to that of one that delivers the opposite message. To prevent such an event, businesses are forced to invest in the protection of their brand and even lobby stricter enforcement, ultimately sidetracking them from their regular operations.

Counterfeiting also has a tremendous impact on the consumer as well. As discussed previously, the integrity of individual consumers can be compromised if they are known as a person who supports the purchase of counterfeit goods, favoring price over authenticity, but they can also be duped in the opposite way as well. In this case, consumers genuinely intend to buy an authentic product, but rather they are tricked into paying too much for a mere fake. This brings about the distinction of types of counterfeiting. On one side of the coin, counterfeiters are attempting to essentially duplicate a brand product, offering a close alternative at a much cheaper price. On the other side of the coin, counterfeiters are attempting to duplicate the product so precisely with attention to detail, that they can pass it off as an original and charge much more than it actually cost to produce. The former is less dangerous, as the consumer generally knows that they are engaging in a counterfeit purchase, and treat the product as such. The latter, however, can lead to many dangerous results. One wide-spread example of this is car brake pads. The consumer, or even sometimes the retail outlet thinks they are buying a genuine brand brake pad, paying what it would normally cost, but in actuality, they are only receiving a cheap knockoff of compressed plastic or fiberglass. The danger is pretty obvious at this point, as the consumer and others could be seriously injured or killed while using such brake pads. But unfortunately, the dangers of counterfeit products doesn’t end there be any means. There has been cases of counterfeit baby formulas being seized that proved to contain possible allergens, which, if not stopped could have killed many babies. But oftentimes, the problem is not realized until it is too late. In 1990, over 100 children died after taking a counterfeit pharmaceutical, which was made to only look like the drug, but contained harmful ingredients. There have also been cases of girls unintentionally becoming pregnant because they were using fake birth control. Unfortunately, there are stories like this all around the world, occurring across the board. It really makes you think about how ignorantly we trust certain products to be safe for us, without any hesitation.

So how can we attempt to control the counterfeiting problem? Well, first and foremost, we need to invest the necessary funds into anti-counterfeiting technologies. There are currently two widely-used anti-counterfeiting practices: ‘track and trace’ and authentication technologies. ‘Track and trace’ refers to practices such as the implementation of RFID, which can be used as the name implies, to track products throughout their shipping process. This would entail incorporating an RFID tag into each product package, setting up RFID scanners at strategic check points and monitoring progress to ensure all products are delivered according to plan. The weakness with this technology is that is only serves to ensure that authentic products make it to their destination without being pirated. It does not, however, help much when it comes to smuggled counterfeits, which often travel in unconventional manners and it could be too expensive to implement in enforcement outside of trade routes. The second method, known as authentication consists of three different types: overt, covert and forensic. Overt methods are generally visible to the naked eye, and are fairly difficult to reproduce (holograms, color shift inks, and watermarks).Covert methods, as the name implies, are generally not visible to the naked eye and require special equipment to authenticate (fluorescent inks, infrared, scrambled graphic encryption). Forensic methods implement chemical and biological properties to secure products and documents, requiring special equipment to analyze. Each of these methods varies in terms of cost and security, depending on how they are implemented. High security items, such as currency often implement more than one type of authentication technology, as seen in newly circulating US bills. Despite the seemingly secure nature of each of these methods, counterfeiters are usually not too far behind. In fact, newly developed anti-counterfeiting measures are often defeated within 18-24 months of being introduced. This leads to the inevitable cycle and trend in global counterfeiting.

With our world innovating technology at the rate we do, in addition to the rapid sharing of information over the internet, there is a constant battle between counterfeiters and anti-counterfeiters. First of all, there is a globalization of consumerism, which is the driving force. Now, people all over the world want to own and be seen with the top global brands. They also want to enjoy the popular forms of entertainment such as music and movies, and they will pursue any means necessary to do so, often without any care of where it comes from. This, in addition to the low cost of international trade and the high earning potential for such a market leads to an explosion of counterfeiting. With sophisticated technologies readily available to the masses, and the ability to ship cheap or sell online, it costs much less to run a counterfeit operation and make a hefty profit. Additionally, it costs more for manufacturers to develop highly secure products and it is difficult and slow to push for the proper regulation to crack down on counterfeiting. Essentially what emerges, is a cyclical situation where manufacturers implement a new anti-counterfeiting technology, counterfeiters defeat it within two years, so manufacturers then come out with a yet another new anti-counterfeiting technology, and so the process continues. In terms of regulation, if a counterfeiter is caught, the sentencing is generally very minimal. In non-federal or non-governmental cases, they can usually post bail for ten thousand to several hundred thousand dollars, depending on the scope of the crime and usually don’t face more than a couple months to a couple of years in jail. On a federal level, however, the bail generally starts in the hundreds of thousands of dollars and goes up, while the jail time might be a minimum of twenty years, also depending on the scope of the crime. While these punishments may seem life-changing and drastic to you or me, it is generally seen as a ‘business expense’ for large, organized counterfeiting operations. As you can see, this is a problem that is extremely difficult to contain, even with harsh punishment standards. In the 1800’s and earlier times, counterfeiters were publicly defamed, by having their ears clipped and their faces branded-forever labeled as a criminal counterfeiter. Although barbaric from our modern perspective, it was really quite an effective method to addressing the counterfeiting problem.

As evident, we are all impacted by counterfeit products at some point in our lives; in fact you have most likely already come into contact with some form of a counterfeit product. Although sometimes reduced to a minor infraction that is often confused with ‘finding a good deal’, counterfeiting has a tremendous impact world-wide, whether financially or in terms of our safety or integrity. I can only hope that this examination of the components, trends and impact of counterfeiting will have you thinking twice next time you see a tempting $20 "Rolex"!

Welcome to The Authenticator!

Over time, this new blog will address the latest trends in brand protection and document security. It will include discussions/analyzes of popular deterrent and authentication methods as well as thoughts on recent headlines and upcoming technologies.

The goal here is to generate new ideas on interoperability and the tiered-approach to security issues...so please feel free to comment or elaborate on any material in this blog.