How AI is fueling the counterfeit economy – and what you can do about it

Keith Shaw: Counterfeiting is no longer just about luxury goods or fake currency. It’s now infiltrating areas like pharmaceuticals, cosmetics, and even automotive and aviation parts. New technologies — including AI — are making it easier for counterfeiters and harder for consumers to detect.

On this episode of Today in Tech, we’re talking about how individuals and companies can fight back against this growing wave of fake goods. Hi, everyone. I’m Keith Shaw. Joining me today is Roei Ganzarski, the co-founder and CEO of Alitheon. Welcome to the show, Roei.

Roei Ganzarski: Thank you very much, Keith. Thanks for having me. Keith: You’re a thought leader in the world of anti-counterfeiting based on the work your company does. Let's start with this: how has technology enabled counterfeiters to thrive in recent years?

Are we talking about a recent phenomenon or something that's been going on for a long time?

Roei: Counterfeiting has been around for decades — easily over 20 years. I remember as a child, you could buy a fake Rolex watch on the streets of Bangkok without much trouble. Back then, it was easy to spot a fake.

You could feel the difference in weight, the build, the movement inside the watch. It was obvious. Today, the challenge is that technology and manufacturing capabilities are so advanced and accessible, it’s nearly impossible to tell the difference.

Sometimes even the original manufacturers can't tell without thoroughly analyzing the product — whether it’s a brake pad, a watch, or a medicine. Fraudsters now have access to the same equipment used by legitimate manufacturers.

What used to be made in shady warehouses is now produced in full-blown factories using identical machines and materials.

Keith: Other technologies are helping them too — like the rise of e-commerce. Talk about how that’s enabled them to distribute fake goods more easily. It’s not just someone selling knock-offs on a street corner anymore. Roei: Exactly.

When we think about how technology enables counterfeiting, there are a few key areas. First is manufacturing. As I mentioned, counterfeiters can now replicate products with nearly identical precision. Second is product design.

Where corporate espionage used to involve physically stealing blueprints, today someone can just buy a product and use high-end 3D scanners — combined with AI — to reverse-engineer it down to the micron. They don’t need to steal designs anymore; they can recreate them. Third is distribution.

As consumers, we love the convenience of buying things online. But that same convenience benefits fraudsters. We no longer go to a store, look the seller in the eye, and get that gut feeling when something seems off.

Now, anyone can set up a website that looks completely legitimate — with logos, brand names, and links to official sites — and you assume you’re getting the real thing. The package arrives looking perfect. But what’s inside may be completely fake.

Even if authorities shut the website down, fraudsters can launch a new one within minutes. It’s a never-ending cycle.

Keith: And even big companies like Amazon struggle with this. Is it just a scale issue — that it’s hard for them to vet third-party sellers? Roei: Absolutely.

That’s why I tell my wife and daughters: never buy skincare products unless it's directly from the manufacturer’s store — even on Amazon. If Olay is selling on Amazon, make sure it’s the official Olay storefront. If it’s “123 Trading” selling Olay cream, don’t buy it.

You simply don’t know what you’re getting. If it’s a handbag or a pair of slippers, and you’re willing to take the risk for a good deal, that’s your choice — though ethically, I still think it’s wrong.

But if you’re talking about products that go in or on your body — like skincare, toothpaste — or products that involve your safety, like brake pads or airbags, don’t take that risk. Even distributors can fake their credentials. Everything can look authentic until it’s too late.

Keith: I also want to bring up social media — TikTok, Instagram, live selling, and influencers. A lot of these people are pushing products and may not even know they’re selling counterfeits. They might just get an email offering money to promote something. Roei: Right. There are two scenarios.

First, the influencers genuinely don’t know. The fakes are so good, even they can’t tell. So, without realizing it, they put their reputation — and their followers’ money — at risk. Second, some do know.

In live auctions, for example, they might show off a real Louis Vuitton or Birkin bag, but the one they send you is a fake. You feel like you got a great deal because you saw the influencer holding the real thing, but you’re actually walking around with a knock-off.

Maybe you don’t care, but chances are you thought you were buying the real product. Either way, the consumer loses.

Keith: And it can damage the influencer’s reputation too. If people realize they were duped, they’re not going to buy from that person again. Roei: Absolutely.

It not only hurts the influencer but also the company that hired them — assuming it’s a legitimate company — and the brand being promoted. Plus, there's a darker side that people don’t often think about. Buying counterfeit goods supports a chain of unethical practices.

Think about the factories making these fake products. Are they treating their workers well? Probably not. Child labor, unsafe working conditions, slave wages — these are very real possibilities. Are they using safe, environmentally friendly materials? Or are they dumping toxic waste into rivers?

Counterfeits are also tied to organized crime and money laundering. These aren’t just cheap knock-offs — they’re tools for funding illegal activity. So whether you're knowingly buying a fake $20 bag or unknowingly purchasing a counterfeit $2,000 item, you’re supporting a much larger, more dangerous system.

Keith: And generative AI has made this even easier. For example, this hat I’m wearing has a hologram sticker. Years ago, that would’ve been proof of authenticity. But now, even holograms can be faked, right? Roei: Absolutely. You can buy holograms online today.

You can also buy the printers that create them — very affordably. Years ago, that level of printing gave people confidence that a product was real. That’s why people leave the stickers on — it's a badge of authenticity.

But now, counterfeiters know consumers trust the sticker more than the product. So instead of perfecting the knock-off, they just put a high-quality hologram on a mediocre product. It looks good enough to fool people.

We want to believe we’re getting a deal, and the presence of a shiny sticker gives us that reassurance.

Keith: And with generative AI, you can also fake logos, boxes, and packaging. You might think everything looks legit until you actually open it — and even then, it might be hard to tell. Roei: Exactly. You often don’t realize it’s fake. With a hat, maybe no harm is done.

But what if it’s a brake pad on your car? Or an airbag? Or a medicine someone in your family is relying on to survive? Counterfeit medicines and tampered pharmaceuticals are a huge issue. And most people don’t even realize they’ve been duped.

Keith: Why have counterfeiters moved into high-risk areas like medicine and car parts? Is it just about the money? Roei: Yes — it's about the money.

Whether it’s full-on counterfeits or gray market goods — like expired or failed-quality items that should have been destroyed but weren’t — these products can be extremely lucrative. Medicine and car parts are expensive, in high demand, and move in large volumes.

And when those products show up with official-looking logos, barcodes, stickers, and packaging, pharmacists and consumers assume they’re legitimate. But many of them aren’t. Keith: So how do these counterfeit products make it into trusted supply chains? Are companies unaware, or are they just hoping for the best?

Roei: The real challenge is that supply chains have become globally distributed and digitally managed. Decades ago, a purchaser at a pharmacy might have personally known the pharmaceutical rep or received hand-delivered shipments.

Today, products — whether pharmaceuticals, brake pads, engine parts, or even military systems — are assembled across multiple regions, passing through numerous hands. At any point in that chain, someone can be paid off to insert a counterfeit.

And with so many intermediaries — first-tier, second-tier, third-tier suppliers — manufacturers often don’t know where the parts are really coming from. Something can be swapped in right before it gets to the OEM or even after. It used to be simple to oversee the flow of goods.

Think of a Brinks truck — there were clear checkpoints, people verifying contents at every step. Now, global supply chains are so complex that it’s nearly impossible to maintain that level of scrutiny.

Keith: Can you give us an example of that happening? Roei: Sure — and it’s a terrifying one. Just last year, a company in the UK called AOG Technics, a registered aerospace parts supplier, was caught selling used aircraft engine components with forged documentation claiming they were brand new.

Now, these were legitimate parts, but they had already exceeded their usage limits. Engine parts, like brake pads, have life spans for a reason — after so many cycles, stress and fatigue set in and they’re no longer safe for flight.

AOG Technics was cleaning them up, falsifying paperwork, and reselling them as new. And this wasn’t just affecting obscure airlines — major carriers like American, Southwest, and Delta were using these parts on commercial flights. Thankfully, this was discovered by a sharp technician and not because of a catastrophic crash.

But that’s how close we came. Even though some of the individuals involved are now in prison, it doesn’t erase the years people unknowingly flew on planes with compromised components.

Keith: I remember we talked before the show about a healthcare-related case too — something involving repackaged medical supplies? Roei: Yes, that one is equally disturbing.

A few years ago, a subsidiary of Johnson & Johnson — an excellent company, by the way — was unknowingly involved in a scandal involving fake surgical products.

A hospital in Kentucky was performing brain surgery using a product designed to absorb free blood and then dissolve safely inside the body.

During one operation, a surgeon picked up a packet and said, “This doesn’t feel right.” He set it aside, completed the surgery, and later had his team send the item back to the manufacturer to check for defects.

Johnson & Johnson reviewed it and said, “This isn’t ours.” The packaging was authentic, but the product inside was not. An investigation revealed a horrifying supply chain: a U.S.

company in Ohio had obtained expired Johnson & Johnson products, shipped them to India, where workers in unsanitary conditions either altered expiration dates or replaced the product entirely.

These repackaged items were then routed through Dubai, sent to a distributor in Florida, and sold back to hospitals through the original Ohio company. Thousands of brain surgeries had already used these fake materials before anyone caught it.

And while Johnson & Johnson sued for intellectual property infringement, most of the perpetrators faced little to no consequences. The woman in Florida got a year in prison. Others? Nothing. And this all happened right here in the U.S.

Keith: That’s just astonishing. The level of coordination — and deception — involved in that case is insane. But what does that say about how much money these counterfeit operations must be generating? Roei: Exactly. The level of effort speaks volumes about the potential profits.

And people still associate counterfeiting with fake handbags sold on Canal Street. But what we’re talking about is organized, sophisticated, large-scale criminal enterprise — with real human and environmental consequences. Keith: So is part of the problem that the laws just aren’t keeping up?

Or is it a lack of enforcement? Roei: Actually, the laws are there. And the enforcement agencies — like U.S. Customs and Border Protection (CBP) — do an incredible job with the tools they have. But that’s the issue: the tools are outdated.

Right now, the system still relies on proxies — things like barcodes, QR codes, hologram stickers, or certificates — to prove authenticity. But those proxies can be faked. It’s just like using a fake driver’s license to get into a bar. If it looks real, the bouncer lets you in.

It’s the same concept with counterfeit goods. If a product has a sticker that looks legitimate, people trust it.

High-security facilities — like airports or the Pentagon — don’t rely on badges anymore. They use fingerprints or biometric scans. Why? Because you can’t fake that easily. It’s part of you. That’s where product verification needs to go.

Until we stop relying on packaging, labels, and stickers, and start verifying the product itself, counterfeiters will keep winning — no matter how many laws you pass or agencies you fund. Keith: That’s a great analogy. So, let’s talk about how companies — and consumers — can actually fight back.

What technologies are out there now that can help verify authenticity? I know Alitheon has a solution, but I want to keep this discussion general for now. Roei: Sure. Let’s start with consumer behavior, because that plays a big role.

First, if you’re a consumer and you want to buy the real thing — especially when it comes to products that go in or on your body, or impact your safety — buy directly from the manufacturer. Not a reseller. Not a discount site.

Not a random third-party seller on Amazon. Go to the source. Second, if you’re shopping online, be vigilant. A good deal doesn’t always mean a smart deal. Just because something is 50% off on a Canadian pharmacy site doesn’t mean it's legit.

If you're driving to Vancouver and walking into a licensed pharmacy, that's one thing. But if you're buying from an unknown website claiming to be in Canada? That’s a huge risk.

Roei: Also, consumers should start demanding transparency from brands. Ask, “What are you doing to ensure the products I’m buying are real and safe?” That’s how environmental and social governance (ESG) initiatives gained traction — because customers pushed for it. The same can happen here.

As for manufacturers, they need to invest in technologies that go beyond stickers and holograms. If you’re relying on visual cues alone, fraudsters will beat you every time. The tools used to detect counterfeits today are essentially the same as they were a decade ago — just shinier.

Keith: I’ve heard people say that blockchain could help with tracking authenticity. Does that hold up? Roei: Blockchain is a great technology for protecting and tracing data. If I have verified data that says, “This phone was purchased at Best Buy and includes a one-year warranty,” that’s valuable.

Blockchain ensures the data isn’t tampered with. But the key problem remains: how do I know the data in the blockchain is connected to this specific phone? Usually, the connection is made through a barcode or a QR code — again, a proxy. And proxies can be faked.

So even if the blockchain data is pristine, if someone places a copied QR code on a fake product, it creates a false sense of security. That’s the issue. Keith: So what should consumers do? Roei: Two things. First, only buy from original manufacturers or verified sellers.

If you’re buying from Amazon, make sure it’s the brand’s official store, not some reseller with a name like “Super Global Traders.” Second, start demanding better tools for verification. Ask companies, “How can I tell this is real? What are you doing to protect me?” That’s how consumers influence change.

Roei: We’ve seen this before with environmental and labor practices. Now it’s time to apply that same pressure to product authenticity and safety. If enough consumers demand it, companies will respond. On the manufacturer side, they need to move beyond cosmetic fixes.

A new hologram or fancier barcode is not going to stop counterfeiters. Fraudsters can steal entire rolls of anti-counterfeit stickers and place them on fakes — it’s already happened. So companies must invest in product-specific identification technologies that can’t be replicated or removed.

Keith: I’ve seen some groups really take this seriously. The NFL, for example, has a huge legal team that cracks down on fake jerseys. Even a small-town barber in Massachusetts selling knock-off jerseys got hit with a cease-and-desist. Roei: That’s right.

Major organizations, CBP, and law enforcement agencies are all doing the best they can. But they’re fighting a growing problem with the same old tools. And the numbers show it. The counterfeit and gray market economy is now estimated at over $3 trillion annually.

Last year, it was around $2.5 trillion. The year before that, $1.8 trillion. It just keeps growing.

Roei: Yes, it’s great when we hear about a $200 million seizure of fake goods — but think about how much is slipping through the cracks. The tools used by law enforcement are essentially the same as they were ten years ago.

The criminals, on the other hand, are constantly evolving. There was one case where thieves broke into a warehouse — not to steal high-end products, but to steal rolls of anti-counterfeit stickers. Think about how genius that is.

Why go through the trouble of faking the entire product when you can just grab the thing that makes it look authentic? Keith: So the takeaway here is, consumers really need to stop trusting stickers and barcodes. Roei: Exactly.

We’ve reached the point where stickers and labels don’t mean much anymore. They’re too easy to replicate.

Keith: A lot of these scams target younger audiences too. My teenage daughter loves shopping from certain e-commerce sites based in China. She’s focused on finding cheap deals — like a $5 shirt instead of a $40 one.

As a parent, how do I help her understand the risks without sounding like I’m just trying to ruin her shopping experience? Roei: That’s a really important question. I have kids too, and I’ve had similar conversations.

The younger generation, at least in principle, cares more about the environment and social responsibility than previous generations. So I try to appeal to that. I explain that if a $5 item looks like a $50 item, something unethical had to happen to make that price possible.

Was it made by children in sweatshops? Were toxic chemicals dumped into rivers during production? Are workers being mistreated or underpaid? These are real issues. And when you buy a counterfeit — or even an ultra-cheap item that’s deceptively marketed — you’re supporting those practices, knowingly or not.

Roei: Also, ask them: “Why do you need to look like you’re carrying a $50,000 Birkin bag at 20 years old?” There are plenty of authentic, affordable brands out there making stylish products without pretending to be something they’re not.

You don’t have to risk buying fakes just to project an image. Then there’s the whole issue of fast fashion. These cheaply made items often end up in landfills after a few wears. It’s terrible for the environment. So the message to young people should be: think beyond the product.

Think about the impact your purchase has on people, on the planet, and on your own values. Keith: And older consumers aren’t immune either. Whether it’s a $20,000 watch or car maintenance parts from a discount site, the risks are real. Roei: Exactly.

Older consumers might think they’re saving money by buying brake pads online or medicine from a shady overseas pharmacy. But you’re risking your health, your family’s safety, and your car’s performance just to save a few bucks. It’s short-sighted and dangerous.

And again, this isn’t just happening in China or developing countries. These scams are happening right here in the U.S. — with real people suffering real consequences. We’re talking about fake, expired, or tampered medication, brake pads that fail, and airbags that don’t deploy. It’s not hypothetical.

Keith: So looking ahead — do you think this problem is going to get worse? Or will new technologies, like what you’re building at Alitheon, actually turn the tide? Roei: Here’s the good news: yes, the problem can be solved. Think about fingerprinting.

Airports, government buildings, and secure facilities use biometrics to verify identities. Why? Because you can’t fake a fingerprint. Now imagine if products had that same level of identity.

If the product itself could tell you it’s authentic — without relying on a sticker or certificate — then counterfeiters would be out of luck. You’d eliminate the need for proxies entirely.

If enough companies adopt this mindset, and each protects their own supply chain, we can eliminate the problem from the inside out.

Keith: That’s a great point. If fraudsters know a certain company uses technology that makes it impossible to spoof the product, they’ll just move on to an easier target. Roei: Exactly. It becomes a deterrent.

If I’m a counterfeiter and I know your product uses fingerprinting technology or another robust identification method that can’t be forged, I’m not going to waste my time trying to replicate it. I’ll go after the company still using stickers and QR codes.

So each company needs to take responsibility for protecting their own products. And if enough of them do, the ripple effect could clean up entire industries. Keith: Roei Ganzarski, thank you again for being on the show.

You’ve given us both an education and a bit of a scare — always the sign of a great guest. Roei: I appreciate it, Keith. It’s a serious topic, but I’m glad we could dive into it in a way that helps both companies and consumers understand what’s at stake.

Keith: That’s going to do it for this week’s episode. Be sure to like the video, subscribe to the channel, and leave your thoughts in the comments below if you're watching us on YouTube. Join us each week for new episodes of Today in Tech.

I’m Keith Shaw — thanks for watching.