SOUTH BEND — On a Monday afternoon in the South Bend Police Department parking lot, fraud detective Dominic Zultanski was tired. He'd been wheeling box after box, containing 10,000 DVDs out to a commercial-sized shredding machine.

Every single copy would be destroyed. They may be popular music and movies, but these particular DVDs won't be played anymore. They're fakes: pirated copies of the real thing to be sold on the street. The Motion Picture Association of America considers it a $250,000 loss to their sales.

"We've gotten these out of gas stations, we've gotten these out of homes," said Zultanski. And fake DVDs aren't the only kinds of counterfeit goods he's seen here.

"There are handbags and we've also had activity with watches."

Fake merchandise, often made overseas and shipped to the states, is no longer confined to the back alleys of big cities anymore. Just this spring, St.Joseph County Police, working with the Nike Corporation, raided a South Bend convenience store and confiscated close to 3,000 Nike knock-offs.

Each year, federal estimates show counterfeit products in general cost the United States $250 billion in lost sales.

In some cases, it's not just the loss of money that concerns authorities. It's where the money made on counterfeit goods may be going.

"This is just another way for criminal organizations to gain money for their craft," said Zultanski.

In two recent local cases, police said the people selling fake movies and music were also dealing stolen guns and drugs.

In 2002, international law enforcement officials testified before a Congressional committee, claiming the international trading of phony consumer goods had, in some cases, been linked to organized crime and even terrorism.

"Everyone talks about the six degrees of separation," said Zultanski. "When you're involved in this type of organized crime, you just made your degrees a lot shorter. If you buy one or two (counterfeit goods) you've taken your six degrees of being involved with a terrorist down to two or three."

Police say that doesn't necessarily mean the people selling fake goods locally are terrorists or organized crime bosses, but whether the sellers know it or not, authorities say they're part of the supply chain.

To stop the free flow of counterfeit goods, authorities and businesses are turning to Congress for help. Rep. Joe Donnelly, who represents Indiana's Second Congressional District has co-sponsored legislation that would treat intellectual property theft just like money laundering and other black market crimes.

"We are working hard to get other cosponsors in the House to get this to the floor for a vote and we are hopeful to move this forward," said Donnelly "We are going to go after them criminally and we're going to work to make sure their products cannot enter this country."