Digital Evidence Reveals the Kink in the Supply Chain!

A manufacturer of consumer healthcare products began receiving complaints on their consumer information line. The complaint line determined that the products were purchased at a discount chain and varied in color, texture, odor, and taste. The manufacturer immediately deemed the product was unusable and tainted.

The company, through a law firm, hired a New York based private investigator who purchased several products that were counterfeit.  The product name and packaging of the product appeared to be an exact knockoff as the legitimate product, which included the company’s trademark symbol. 

A case was filed in the Southern District of NY after the company found the copyrights and trademarks had been violated and a Federal Judge deemed it sufficient to be confusing to consumers and signed a seizure order allowing the companies lawyers and along with United States Marshall’s and Digital4nx Group to enter the locations operated by the discounter and a distributor.

It was suspected that the counterfeit merchandise was being warehoused and distributed from these locations.  The locations also included offices where it was suspected that paper and electronic records regarding the counterfeit merchandise were kept.  

On a warm Friday morning in July, Digital4nx Group’s forensic collection team along with the attorneys, private investigators, and the United States Marshall’s convened at locations in New York City, Long Island, and New Jersey.  At approximately 8am EST , we entered the locations simultaneously surprising the workers who arrived just minutes earlier.

Once the Marshall’s served the search and seizure order, they additionally secured the premises and once secured, allowed us to begin imaging disk drives, while the attorneys and PI’s searched for counterfeit products. By the end of the weekend, we were able to image 35 computers in 3 locations as well mobile phones, VoIP voicemail system, and 3 servers.

During the following week, Digital4nx Group forensic investigators identified 2 other locations, including a storage facility blocks away which contained the mother load of counterfeit merchandise. Additionally, we located various e-mail communications between the owner of the distributor and the sources for where and when the counterfeit merchandise were coming from, along with the shipping dates and quantities of past and future orders.  Lastly, We were able to reconstruct and generate reports of total sales of all counterfeit and suspect merchandise as well as identifying other suspect counterfeit merchandise by the company. We provided to the forensic accountants as well as the USAG’s office the reconstructed financials, past shipping manifests, inventory of counterfeit merchandise in various retail outlets as well as determine all the suppliers of the counterfeit merchandise.

Thankfully, no consumers were harmed and the parties were retained early enough to prevent further distribution in the supply chain. 

In the end, the manufacturing company was able to quickly stop the sale of the counterfeit merchandise, avoid consumer harm, and settle the case and recoup the various expenses. I hope this is another example of how using a quality and experienced digital forensic investigation services team to gather the digital evidence, along with proper forensic analysis allowed the attorneys to build a solid case, provided gathering relevant financial information, and locating the foreign sources of the counterfeit goods to prevent further harm to consumers.  The bonus was the client and the attorneys realized a significant reduction in billable time because most of the relevant information was in electronic format and could be easily accessed and used in support of building their case and reducing the overall costs.

Please feel free to contact me for a confidential conversation if I can be of any assistance to you.

Digital4nx Group, Ltd. offers regional digital forensics services for plaintiffs and defendants in civil and criminal legal matters. 
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Rob Kleeger

Digital4nx Group, Ltd., 8 South Main Street - Unit 70, Marlboro Township, NJ, 07746, United States

Rob Kleeger is the Founder and Managing Director of Digital4nx Group, a boutique firm which offers regional digital forensics services for plaintiffs and defendants in various civil and criminal legal matters. Digital4nx Group provides Digital Forensic Investigations, Electronic Discovery Consulting and Advisory Service, Incident Response to Data Breaches and Cyber Security services.

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