[Music]
so we're going to meet the undercover
operatives right now make the buy walk
away and leave a product that they
purchased if anything happens I'm
supposed to go into the bank immediately
this is the black market it's
counterfeit goods it's a legal activity
black market this is shady
this winter I got a tip that made my jaw
drop the car tables on the street in
downtown Los Angeles lined with
just-released in demand beauty products
at a fraction of the retail price
things that adjust its doors and even to
the beauty editor they look totally
authentic so what's the deal I headed
downtown to see for myself
[Music]
this is Facebook a good time having
Sally here Georgia
all right you just walk into some galley
and Morgan allograft
the prices in Santee alley are
astounding
it appears that MAC lipstick is going
for $2 urban decay pallets for 15
instead of 50 so what's the catch
some people are makeup artists will
crumble down here really oh my god
so just as that makeup artists come down
here and buy a lot of this stuff the
majority of the people we're talking to
down here don't want to be on camera but
we found one woman who might talk to us
so we're going to go to assign her
so you have every brand that everyone
wants you had to say Mac Kylie how much
for example is our is a credit let's get
here quick dollars six dollars and then
how do you sell them for so much less
than you would find them like on Kylie's
website for example own online ericsson
for China how do you get it where do you
order line okay a lot of people's in our
for $30 lipstick uh-huh
you know yeah five dollars three dollars
it perfect to pay that yeah I heard
people be having reaction on things some
things no I use in myself oh you do I
never get scared that you don't know
what's in it or like what the conditions
are like and China where they make and
me I think I was being just alive
I think everything's comes from the same
where same thing so you think a lot of
the stuff that you're buying from China
is replica or they're deserving that's
just the same stuff that's what I came
because I use it as use originally the
face and I really don't see a lot of
things there's a record we just save
more money yeah according to sellers
this is the secret to getting cult
products at rock-bottom prices
but are they really the same to find out
I headed to the beauty capital of the
country if it feels like the beauty
industry has exploded overnight it's
because you're right
the makeup category grew by 12% in 2016
and the 445 billion dollar per year
industry is growing at a steady rate of
3% per year and has proven to be
recession proof to the fill the demand
conglomerates like Estee Lauder and
L'Oreal are purchasing indie brands at a
record rate the result is a palpable
demand for expensive luxury beauty
products and atmosphere perfect for
counterfeiting the huge problem and it
seems to be getting bigger I would
compare this industry to say a drug
trafficking organization some of the
things some of the items we've examined
have been found to contain lead arsenic
mercury even horse urine how are the
products getting into the country they
usually come into our Seaport and then
they're they're offloaded and taken to
various distribution points we do our
investigations and we work our way back
and for the most part it takes us to
China to find out just how easy it is to
get the goods in bulk we sent an
undercover reporter into a cosmetics
market in Guangzhou a major
manufacturing hub in China turns out
it's as easy as walking into the right
store which was the first one we tried
these are have stock make connecting you
need to focus in the auto business well
first I have to see the quality college
in the similar to Mac you can ship to
the US yes you know what they make it
with like the animal fat or you know is
it just like the real mmm product same
ingredients are different a little bit
different they can be the same as always
you know in China here very much both
coffee yeah we can make all the same as
always in the way uh-huh but many
customers love it actually what's inside
is very different the FBI reports that
counterfeit cosmetics have been found to
contain dangerous levels of bacteria and
reported reactions include acne
psoriasis serious skin rashes and eye
infections what's more these reactions
can take days to show up which means the
counterfeit products don't always get
the blame they deserve Estee Lauder
seized over 2.6 million counterfeit Mac
products in 2016 alone back in New York
we met with the man in charge of its
global security team what does the dark
underbelly of this look like I traveled
to to China to Guangzhou a couple of
years ago and my team took me around to
some of the locations where these
products are made and it's just
unsanitary conditions I mean there's no
quality control there's no well this
doesn't right meet the test let's take
it off the line you wouldn't eat there
let alone make products there for
distribution this is just a taste of the
kind of conditions that Estee Lauder's
global security team finds when raiding
counterfeit factories both over
and in the u.s. Mac has such a massive
problem with counterfeiting that they
actually have an entire division that's
set up just to try to combat it and they
have a private investigator who sort of
had finding the people who are selling
it on the street so we are going to meet
with this person now go driving in New
York right now for the first time so I'm
going to try to get us there this is
Jimmy Estee Lauder's private
investigator he's the real deal and not
just because people compare him to Tony
Soprano he's ex-military served 20 years
in the NYPD and now he's hired by huge
corporations to get knockoffs off the
street he's going to be showing us just
how they fight counterfeiting right here
in New York City a company like Estee
Lauder will reach out to me they have an
anti counterfeiting program what we'll
do is we'll investigate leads and
determine if they're counterfeit and
conduct an investigation and then
presented to the police so I'm going to
guess that you're not on the street
buying beauty products from the
counterfeiters I do not think I'd be
effective in my role to buy really
positive in order to deliver a
counterfeiting case to the police on a
silver platter Estee Lauder does the
legwork for example Matt gets tipped off
about suspicious product often by
consumers through social media the
global security team develops the leads
then they often hand them over to a
private investigator a case is developed
using undercover operative often
criminal justice students who fit an
average buyers age undercover footage
seals the deal and the products are
inspected by a brand rep who completes
an affidavit that they're counterfeit
before it's all turned over to the cops
all this just to get a single seller off
the corner
[Music]
hi Alexa distance mantacorn would have
hi it's a nice to meet you
Nancy is the expert on authentication so
she's coming out with us largely examine
the products that we're buying to
confirm that their County they can
become agitated they can become
confrontational they can escalate it to
a physical altercation so those are all
the risks involved and doing an
undercover operation without waiting
across the offense okay I don't want to
go away
hello
okay so he set up great
all right we're on the way so the vendor
is on the corner and that what I want to
say Nick so we're going to go up there
and have the opportunity by way so our
friend is behind a white truck oh wow
it was fun before he's not and he's not
hiding it all he's just right out there
right I'll do it
you talk alone yeah see the stable
family they're on a point to make you
guys
I don't nobody on the cover is you're
the undercover I goes an electronic
plate if they just act like you're
dating their brothers from college I'm
just not going to freak you I'm gonna
stay here I can see ya and we're going
to get closer and get out or ever be
careful
if anything happens I'm just to go into
the bank immediately
now I said that I that's the UH Nastasia
I've heard the stuffs really good too
that maggots the face of one that people
miss is 1 3 4 20 25 before 25 how much
you're just me this is 44 any other one
really careful thank you thank you all
right okay so we got all literally they
bought all of this stuff for $120 and
this at the store would just be like it
would be hundreds of dollars like easily
that's wild
I also got a couple things too so now if
he doesn't say can you tell us kind of
it yet
oh sure we can even open it you just
don't I didn't need to
I can tell by the person
and see what are you thinking about that
one pretty obvious the label take a look
at how sheer tonne of stuff shear t own
you guys they spelt tonne wrong on the
packaging tone tion e is how they built
it so what is the final verdict
telephone all of it so far but I'm sure
that they will be what is going to
happen to this guy well after the police
can conduct our investigations then make
the determinations of our findings as
what we see here that he is selling
counterfeit goods he broke the law so it
will be arrested
Jimmy was right the New York seller got
arrested by NYPD using the evidence as a
lot of collected and his goods were
seized but he pled down to lesser
charges to avoid jail time it's hard not
to think it was all just a drop in the
bucket all that work for one table top
of product so what's the long-term
solution awareness the consumer must be
aware of the counterfeit ingredients of
the products of inferior quality that
are out there
ultimately if you eliminate the demand
you address the bar some may say that's
easier said it's done especially when
the efficacy of our cosmetics seem to be
growing less valuable than the name on
the package so what's more important
your skin or the name prints on your
makeup it is IDing the brand the people
will just want to brand people just want
the project to quickly respond yeah
people just want to carry a picture yeah
he was just want to carry a lipstick
that's it
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