Charges for Selling Counterfeit Drugs, Cosmetics and Healthcare Items

Charges for Selling Counterfeit Drugs, Cosmetics and Healthcare Items

Selling counterfeit drugs, cosmetics, and healthcare items is illegal and can result in serious criminal charges. While some people may think it’s harmless to sell fake makeup or medicines, there are good reasons these laws exist. Counterfeit products put people’s health and safety at risk.

Why Selling Counterfeits is Dangerous

Counterfeit drugs often contain the wrong ingredients or incorrect dosages. They may be contaminated or have no active ingredients at all. Taking fake medicines can make people sicker, lead to antibiotic resistance, or cause unexpected side effects. In the worst cases, counterfeit drugs have killed people who took them. Similarly, knockoff cosmetics may be made with dangerous chemicals like lead, mercury, or arsenic. These poisons can cause brain damage, infertility, and other health problems. Healthcare items like fake surgical tools or counterfeit condoms also put lives in danger.

Beyond the health risks, counterfeits fund organized crime. Traffickers often manufacture and sell counterfeits to finance more dangerous or illegal activities. The profits from fake goods may go toward making illegal drugs, weapons trafficking, or terrorism. So stopping the counterfeit trade helps fight other crimes too.

Federal Charges for Trafficking Counterfeit Drugs

In the United States, the main law used to charge counterfeit traffickers is the Federal Food, Drug, and Cosmetic Act. This law prohibits making, selling or possessing counterfeit drugs and cosmetics. Prosecutors often bring charges under Section 331 of the Act which bans “the introduction or delivery for introduction into interstate commerce of any food, drug, device or cosmetic that is adulterated or misbranded.” Adulterated means the product contains ingredients that may be unsafe or make it dangerous. Misbranded means false or misleading labeling.

Penalties under the Act depend on how the prosecutor charges the case. The most serious charges are felonies. For example, trafficking counterfeit drugs as a first offense can lead to 3 years in prison and a fine of up to $10,000. Subsequent offenses jump to up to 10 years in prison. Fines for corporations can reach $200,000 per count. Jail time increases to 20 years if the counterfeits caused serious bodily injury. And penalties can include life in prison if a death resulted from the counterfeit goods.

Prosecutors may also charge counterfeiting under the federal RICO (Racketeer Influenced and Corrupt Organizations) law. RICO adds stiffer penalties for crimes committed through an ongoing criminal organization. The law aims to break up organized crime rings. RICO charges for counterfeits can include up to 20 years in prison.

State Laws Against Counterfeits

In addition to federal laws, most states also have laws prohibiting trafficking in counterfeit goods. Charges often include trademark counterfeiting, unfair competition, or trademark dilution under state statutes. Penalties vary but may include several years in jail or prison as well as large fines. For example, under California law:

• Trademark counterfeiting can lead to up to 1 year in county jail or state prison.
• The fine for a first offense is up to $100,000, up to $200,000 for repeat offenses.
• Additional penalties include forfeiture and destruction of the counterfeit goods.

State laws may also prohibit the sale of adulterated or misbranded cosmetics and drug products. The charges mirror federal law but are prosecuted by state authorities. Penalties include fines and jail time determined by each state.

Defenses to Counterfeit Charges

For those accused of trafficking in counterfeits, possible defenses include:

• Lack of knowledge – Defendants may claim they did not know the goods were counterfeit. But prosecutors can argue they should have known or were “willfully blind” to the goods being fake.
• No intent to defraud – Defendants may argue they did not intend to mislead or deceive customers. However, prosecutors only need to show the items were fake, not prove intent.
• Free speech – Asserting a constitutional free speech defense is unlikely to succeed. Courts have ruled trademark laws limit commercial speech but do not violate free speech rights.

Consulting with an experienced criminal defense attorney is important for those facing counterfeiting charges. A lawyer may be able to negotiate reduced charges or present defenses aimed at minimizing penalties.

Civil Liability for Counterfeits

In addition to criminal prosecution, selling counterfeits can lead to civil lawsuits by brands whose trademarks were infringed. Lawsuits may seek damages from lost profits due to the fake goods. Courts can order monetary damages for past infringement. Courts can also issue injunctions to stop future counterfeiting activity. Willful infringement penalties can include up to $2 million per counterfeit mark.

Conclusion

Trafficking in counterfeit medicines, cosmetics, or medical devices threatens public health and safety. State and federal laws impose stiff criminal penalties to deter this dangerous activity. Those caught selling fakes may face years in prison as well as heavy fines. With so much on the line, following the law is the wise choice over risking counterfeit charges.

References

U.S. Food and Drug Administration. Federal Food, Drug, and Cosmetic Act (FD&C Act)

U.S. Department of Justice. Criminal Resource Manual: Trademark Counterfeiting (18 U.S.C. 2320)

California Legislative Information. California Penal Code Section 350

Cornell Law School. Trademark Infringement