The deals are too good to be true. A Movado watch for $25, a Gucci handbag for $20. But there's a reason - and when law enforcement arrives, whether on a New York City street corner or at a flea market in Derry, the sellers of such items vanish like cockroaches when a light is flipped on. Their wares are fake. And while most of their customers know that, few apparently realize how much their consumption of counterfeit products hurts legitimate manufacturers and the economy.

The FBI estimates that counterfeiting and piracy cost the American economy between $200 billion and $250 billion per year in lost sales. Globally, the World Customs Organization says intellectual property theft costs the economy more than $500 billion, the equivalent of 5 percent to 7 percent of world trade. The lost trade means lost production jobs - up to 750,000 in the United States alone, according to Immigration and Customs Enforcement.

Federal officials, working with the Derry police, spent two years investigating the sale of counterfeit products at a local flea market. Their raid, earlier this month, resulted in the arrest of three New Yorkers who face up to 10 years in prison and $2 million in fines. The value of the thousands of fake items seized by the police has yet to be estimated, but officers said goods seized in a similar raid at a Salem flea market in 2007 netted $250,000 worth of wares. Raids at flea markets in other states have netted bigger hauls.

Fake purses have been flea market mainstays of late and account for the bulk of goods seized. Women who want the prestige of carrying a bag bearing the label of Prada, Coach, Louis Vuitton and other top design firms but aren't willing to pay hundreds or thousands of dollars are the main buyers, though some are local crooks who purchase the bags at the flea market and sell them as the real thing to suckers using internet auction sites.

Expensive clothes and perfume, movies, CDs, tools, cosmetics, computer software, and even medical devices and prescription drugs are routinely counterfeited. China is the source for about half the goods seized.

As long as people are willing to buy fake brand-name items, the problem will persist. Law enforcement usually only drives sellers to a different location. A bill filed by state Rep. Laura Pantelakos, a Portsmouth Democrat, could change that by giving state and local authorities the tools to arrest peddlers of bogus bags and other counterfeit goods. It makes the creation of more than five fake labels, product codes and sales receipts a felony. It also makes the knowing sale of fakes a misdemeanor for a first offense and subsequent sales felonies.

The new law will make New Hampshire less attractive to itinerant crooks. It will also make cheap knockoffs harder to come by. That's a good thing. Buying a product that looks like the real thing but isn't may seem like a victimless crime, but it isn't. Among the victims are the people who lost a job or didn't get one because of the counterfeit trade, and the people who were injured or killed when they thought the medical devices, medicines, and auto and airplane parts they bought cheap were the real thing.

Correction

Friday's editorial understated the salary of Concord Hospital CEO Michael Green by listing only a portion of his compensation. According to the IRS 990 form the hospital filed for 2007, Green earned just over $734,000.