Inside the ‘notorious’ Canadian shopping mall on a U.S. trade irritant hit list

Robert Whalen spends countless hours combing through stalls and stores for counterfeit goods and knockoff brands at the Pacific Mall in Markham, Ont.

The large mall in suburban Toronto has long held a reputation as a place to find fake-branded footwear, apparel, electronics, phone cases and other goods. So much so that it has faced widely publicized police raids, parliamentary hearings and an untold number of sting operations conducted by private investigators on behalf of the world’s biggest brands during the past couple of decades.

“I have to say that mall made me a lot of money as an investigator because I was there all the time,” the former police detective turned private investigator said. “I’m not there very often anymore because it’s relatively cleaned up.”

Yet even as Whalen and others working against counterfeiting say the problem has subsided, Pacific Mall retains its reputation as an oasis for counterfeit goods, at least according to the Office of the United States Trade Representative (USTR), which is responsible for developing and promoting that country’s foreign trade policies.

The USTR once again placed Pacific Mall on its list of “Notorious” marketplaces this year, alongside such websites as ThePirateBay and physical marketplaces like the Huaqiangbei Electronics Malls, a shopping tower in Shenzhen, China.

Landing on the USTR list doesn’t carry a uniform or inherent penalty, but Pacific Mall’s latest showing comes in the midst of a tense U.S.-Canada relationship, when any irritant can take on enhanced significance as the two countries reset the framework that has governed trade for the past 30 years.

“A lot of the rights holders, the brands, see it as sort of emblematic of the issues that they face in Canada on an annual basis,” Travis Johnson, legislative affairs counsel at Washington, D.C.-based International AntiCounterfeiting Coalition (IACC), said.

The IACC recommended the USTR place the Pacific Mall on this year’s Notorious list, as the non-profit has done for much of the past decade, because it thinks counterfeit apparel, footwear, consumer electronics and other luxury goods remain an intractable problem there.

“Cease-and-desist letters served on vendors at Pacific Mall are generally ignored; assistance from law enforcement to pursue known bad actors was described as ‘inconsistent, at best,’ and the mall’s management is said to be ‘largely disinterested in taking the steps necessary to monitor compliance among their tenants,’ Johnson said in an October 2024 letter to the USTR.

In other words, the Pacific Mall has become a stand-in for a broader problem in Canada, which is a lack of intellectual property (IP) enforcement by the country, despite some saying the mall is no longer the hub for counterfeit goods it once was. Even Johnson said IP enforcement at the mall has improved at times, though those efforts have fluctuated over time.

The Pacific Mall may be the only Canadian marketplace specifically named by the USTR, but the agency also placed Canada on its watchlist of 18 countries with poor IP enforcement in a special report released earlier this year.

Others on the list include Algeria, Guatemala and Pakistan. They are all one step below the “Priority Watch List,” which includes eight countries such as China, Mexico and Russia.

Canadian border agents hold ex-officio authority to seize counterfeit goods, but do not consistently use it, according to the USTR. It also said stream ripping, a way to illegally watch movies online, is rampant and illicit piracy devices are widely available.

“A top trade priority for the administration is to use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services and to provide adequate and effective protection and enforcement of intellectual property rights,” the USTR said.

An Organization for Economic Co-operation and Development (OECD) report in May said counterfeiting is a growing problem worldwide, accounting for US$467 billion in global trade, according to the latest figures, which date from 2021.

China “continues to be the primary source of counterfeit goods,” the OECD said, although other regions are beginning to significantly contribute to the problem.

Recently, counterfeiting has expanded to new categories of goods that pose unique risks to public health, including “automotive parts, medicines, cosmetics, toys and food,” the OECD said.

It also said counterfeit goods are “becoming a major source of income for organized criminal groups.”

It is not the first time Canada has landed on the USTR’s watchlist of countries because of its level of IP enforcement, or lack thereof, but the upshot of the report appears to be resonating more loudly in other countries in an era when U.S. President Donald Trump has made bold proclamations about reinventing global trade.

For example, in Vietnam, which was placed on the USTR’s watchlist, Reuters reported that Prime Minister Pham Minh Chinh has “urged the country’s anti-counterfeit task force to devise new ways to fight fake goods, trade frauds and smuggling.”

By contrast, Prime Minister Mark Carney has focused much of his attention on breaking down barriers such as interprovincial trade friction and reducing Canada’s dependence on the U.S.

A spokesman for the Canadian Border Services Agency (CBSA) said the agency refers intercepted counterfeit shipments to either the Royal Canadian Mounted Police or Health Canada for enforcement actions under their respective mandates.

But if no action is taken, the CBSA detains the goods so that a representative of the brand owner can pursue private litigation. If the owner does not wish to do so, the goods are released to the importer.

Through September 2024, the CBSA had detained 202 shipments valued by the importer at around $38,000. The number of detained shipments in 2021 surpassed 1,000 and hit a peak value of more than $400,000 in 2022.

Those don’t seem like big numbers, but Harley Lewin, a U.S. lawyer who has long represented brands battling counterfeiters, said Canada has always posed a dilemma for some brands.

“On the one side, the brands don’t like to spend a lot of money up there because the market just isn’t that big,” he said. “But on the other side, there is a certain, let me put it this way, lack of enthusiasm on the part of Canadian law enforcement to institute investigations on their own.”

Some lawyers said the bulk of IP enforcement falls on them and that Canada’s laws are not strong enough.

Lorne Lipkus, co-founder of Lipkus Law LLP, said a brand that believes it has identified counterfeit merchandise can obtain a court order asking the vendor to preserve the evidence — the fakes or counterfeits — for a court action, which could be a motion for judgment or a trial.

“We have to advise them that it is voluntary in nature, that I cannot force them to give up the product or the documents,” he said, “but if they do not, the court could hold them in contempt of court, and that contempt of court could result in fines or imprisonment.”

The problem, Lipkus said, is that many vendors who sell counterfeit merchandise employ underage people who are paid in cash and do not have identification on them, which makes it difficult to enforce any court actions.

Part of what has made Pacific Mall particularly difficult to deal with, he said, is its legal structure as a condominium corporation, which means each stall has a separate owner, perhaps more than one, often overseas.

In other words, there isn’t a central owner leasing out space as there would be at some other malls.

But Lipkus, who estimated he has served 1,000 orders on vendors at the Pacific Mall starting in the late 1990s when it first opened, said there has been an arc to the mall’s fraud problem.

Although there is no central management, there is a company responsible for managing the mall that at times has taken an interest in rooting out counterfeiting. He said the current management started doing that about a year or two ago.

Now, fake goods are no longer displayed as brazenly as they once were there, such as when more than 30 police officers raided the mall in 2018 and seized thousands of goods.

“Anybody who knew anything about the Pacific Mall at that time knew that it was the hotbed for counterfeit products,” Lipkus said. “Tour buses would pull up on a regular daily basis with tourists who would go in there just to buy counterfeits.”

But things have changed over time. Lipkus’s firm, and others, have sent private investigators into the mall and served orders on vendors they believed were selling counterfeits, often bringing civil lawsuits to enforce their actions.

Mall management has sometimes helped reinforce the message by telling vendors they need to take such investigations and suits seriously.

The cumulative effect of brand enforcement and the commitment of the mall’s management has resulted in a cleaner mall from a counterfeiting perspective, Lipkus said.

“My gut reaction, and I know this might surprise you, is that I really feel that there are some people at Pacific Mall (now) who do not like having a reputation of selling counterfeits; (they) do not want that,” he said. “They want to be known for selling good, quality merchandise.”

Lipkus does not even think it’s the worst marketplace in Canada as far as counterfeiting goes, with that distinction going to an unnamed flea market in Quebec.

Yet, the mall’s reputation lives on. In May, he travelled to San Diego for an annual conference hosted by the IACC and fielded a question specifically about the Pacific Mall while speaking on a panel.

“My answer was that when I first started doing work on Pacific Mall, I had no trouble finding 200 places with counterfeits,” he said. “Now, there’s not 100, there’s not even 50, so whatever it is, it’s significantly reduced.”

The problem may be receding to the point that it’s almost forgotten about. Philip Duchen, president of the condo board that oversees the mall, said he was unaware of the USTR report placing the Pacific Mall on the notorious list.

“To my mind, it’s dropped off the radar screen,” he said. “It’s not something that … I was consciously aware of. I didn’t, wouldn’t even know how we would have known that the Trade (Representative) would have published an article.”

Duchen said his board has been focused on helping its vendors move through the difficult economic periods that both accompanied and followed the pandemic, when shopping in brick-and-mortar retail stores fell to new lows.

“I can’t tell you how many tears have been shed in meetings that I’ve had with people just trying to survive,” he said.

Whalen, the private investigator who still visits Pacific Mall around once a month, if not more frequently, to hunt for counterfeits, said the food court — where you can find hand-pulled noodles, soup dumplings and other interesting cuisine — always makes the trips worthwhile.

But he said there are no longer stores openly selling fakes.

“Counterfeits are not hard to find, but it’s harder now to find them in big groups,” Whalen said. “I actually kind of like the Pacific Mall story because it’s one that has worked.”

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