Episode 11: Fishy Freight, Nike's Counterfeit Win, and Shipping Fraud

PSM released a report this week on fishy freight shipments of medicine into the country, using data we pulled from the FDA’s medical freight shipments database. We are finding two kinds of fraud here. First, we’re seeing shipping manifests where the manufacturer listed on the report is not an FDA-registered entity, which means it’s been made in a facility never inspected by the FDA. Which means it’s illegal to enter the country.

 

Second is that we’re seeing people misdeclare the product code on an item to evade interdiction.  We found two Schedule 1 controlled substances, mescaline and LSD, coded as anti-depressants and antibiotics. The codes said antidepressant, but the description in text said LSD.  I’m guessing they just have machine scanning of codes and are not even looking at the text.

Third, a Florida district judge has granted Nike a partial win in a legal battle with a social media influencer, finding that he had infringed the sportswear giant’s trademarks through selling counterfeit goods. Social media influencer Eben Fox, who posts under the name Cedaz, had amassed more than a million followers online posting regular content about counterfeits, which Fox also refers to as “reps”, “replicas”, or “fakes”.  The Judge found that it was “undisputed” that Fox sold counterfeit Nike goods in connection with the popular mobile phone payment app CashApp, and that Fox posted counterfeit Nike shoes for sale on the social media platform Discord.

 

We’re seeing a lot of really weird things springing up around the trade war and what Shabbir is seeing in online discussions is wild, like customs agents talking about a spike in country of origin fraud combined with transhipping. Sven is noticing that there’s a big spike in demand for bonded warehouses, so people managing cross border inventory have a place to stage goods until there’s a break in tariffs. [Story1, Story2]

Sven’s also noticing manufacturers pitching cheaper versions of high end goods at a discount because it doesn’t have the logo on it.