SELLING COUNTERFEIT GOODS is a booming--and blatant--business. U.S. manufacturers fume that worldwide losses from bogus goods have ballooned to $200 billion a year, up from $5.5 billion in 1982. Reason: The cops prefer to chase drug dealers and murderers. So peddlers sell pirated movie videos right in front of the U.S. Patent & Trademark Office in Washington.

But there's a crackdown in one spot. The Manhattan District Attorney's office is seeking to evict knockoff artists from a major distribution center, a five-story building at 1165 Broadway, near 27th Street, where officials say wholesalers flock to collect fake merchandise. Previous raids have failed to stop counterfeiters, who simply open up shop in another part of the building, which also contains legitimate distributors.

With the help of 1165's landlord, Sam Haddad, the D.A.'s office is suing to throw out alleged counterfeiters under New York's "bawdy-house law," enacted in the 19th century to evict prostitutes. Two tenants have agreed to leave, and three others could face eviction if they don't settle, says their lawyer, Peter Verby. But six more have filed a motion to dismiss their cases, arguing that the bawdy-house law applies only to vice crimes. Victimized companies, including Guess Jeans and Ralph Lauren, hope other cities can find statutes to attack knockoff havens such as those on Santee Alley in Los Angeles and Buford Highway outside Atlanta.

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