Even though it is a violation of federal law to offer, display for sale or actually sell any good in a manner that falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian or Indian tribe or Indian arts and crafts organization, every year our federal government witnesses hundreds of millions of dollars worth of foreign-made, counterfeit Indian arts and crafts flooding our domestic market.
These imports are made in China, the Philippines, Mexico and other places, and do real economic harm to authentic Indian artists. These imitations ruin the integrity of the market for authentic goods by reducing the demand for the real thing. Some observers will remember the now-famous case of the town in the Philippines that changed its name to ”Zuni” so that it could stamp the phrase ”Zuni made” on the ersatz jewelry it shipped into the United States. The story would be funny were it not for the fact that the investigative and prosecutorial arms of the government sit by and allow this to occur year after year, administration after administration, despite the efforts by some in Congress to put a stop to these foreign rip-off artists.
Congress has revisited the issue time and again and has cajoled the Department of Justice to take up and file at least one criminal case and in 1990, and again in 2000, amended the act to increase both criminal and civil penalties for violations. On the criminal side, a single violation of the act brings with it a fine of not more than $250,000, 5 years in prison, or both. Subsequent violations cost either $1 million, 15 years, or both. Civil suits can result in an injunction to stop the activity as well as treble damages (defined as gross profits) or $1,000 per day for each day the activity continues. Courts are also authorized to award punitive damages, attorneys’ fees and the costs of the suit. Arizona Sen. John McCain has introduced legislation again this year that would increase the criminal penalties for violations of the act.
The most surprising aspect of all this is that not a single criminal prosecution has been filed for violations of the statute. Not one. Ever. In the 1980s and 1990s, the U.S. DOJ’s rationale was that ”scarce resources and higher priorities” occupied the time of federal prosecutors. In the wake of Sept. 11, 2001, and the ongoing war on terrorism, these rationales would seem ever more persuasive.
How then to explain the zeal with which the United States is pursuing people who have the audacity to buy and bring back into the country a box of Cuban cigars? The Department of Treasury’s Office of Foreign Assets Control is evidently launching a dragnet in the search for offenders and their illegal booty. Indeed, in letters sent to people who made recent purchases from cigar shops abroad, OFAC reminded the recipients that breaking the ban on these outlaw smokes could result in prison time up to 10 years, $250,000 in individual fines and $1 million in corporate fines.
Selective prosecution of our nation’s laws has a corrosive effect on our society over time. Even a single, high-profile criminal case involving a large volume importer or distributor would go a long way to discourage these activities. Until then, a person is free to purchase all the fake Indian art, rugs, dolls and jewelry he may want without fear of prosecution; but if he brings home a handful of cigars from an island in the Caribbean, he might very well end up in federal prison.
Paul Moorehead is a partner in the Indian Tribal Governments Practice Group in the Washington, D.C., office of Drinker Biddle & Reath LLP, and was the staff director and chief counsel to the Senate Committee on Indian Affairs.