— A big counterfeit coupon bust grabbed headlines last week, and authorities have called it the largest counterfeit ring to operate in the United States.

On July 10, 2012, three women in Phoenix were arrested and charged with illegal enterprise, forgery, counterfeiting and operating fraudulent schemes. For more than four years, the women created coupons for free products and sold them on several websites, including Ebay.

More than $25 million in counterfeit coupons were seized in the bust, along with four homes, 21 vehicles – including luxury cars, an RV and a 40-foot speedboat – and 20 guns. The police also seized 12 bank accounts, one of which  contained more than $2 million.

This was a large-scale operation. The counterfeits offered everything from free boxes of diapers to free multipacks of toilet paper to free dog food. At the time of the bust, the counterfeiters’ main site, savvyshoppersite.com – which has no relation to the Savvy Shopper free coupon magazine that is available in many parts of the country – offered counterfeit free-product coupons from 40 manufacturers.

If you’ve ever seen the website, you might wonder how anyone could believe the coupons were legitimate. Shoppers were required to spend at least $50 on coupons at a time, pay for orders with a Moneypak (a prepaid debit card) and have a referral from a current customer. The site also advised: "Please do not share this information with people that you don't actually know. This includes forums and any public viewing areas or websites."

What kind of business doesn’t want more customers or people linking to its website? Legitimate businesses love free publicity from happy customers! But SavvyShopperSite tried to operate under the radar, gaining more business from existing clients without attracting too much public attention.

Savvyshoppersite.com and a spinoff site even offered tips for shoppers on how to deal with rejection at the checkout if a cashier scrutinized the coupons. It said to avoid big-box retailers (because, it said, smaller chain and independent stores are more likely to take the counterfeit coupons). “If you are ever told your coupons are fakes, be prepared to stand your ground,” the site advised. “Tell the store personnel your coupons come directly from the manufacturer and are 100 percent legitimate.”

Because many cashiers know to look for a security hologram on free-product coupons, the alleged counterfeiters even advertised on one of their websites that they would add a holographic sticker to your fake coupon for an additional $3.

Because the counterfeit coupons were of high quality, often mirroring the high-value coupons manufacturers actually use, cashiers often accepted them. Manufacturers and stores faced huge financial losses when the fake coupons were discovered.

I have always advised against purchasing coupons online, whether on Ebay or another coupon resale site. If you buy coupons online, you never know what you’re going to get. This stance often generates negative emails, especially from shoppers who enjoy buying coupons online. But the Phoenix case is a dramatic example of what can happen. Don’t pay for coupons. You don’t want to involve yourself in buying, possessing or using counterfeits. And saying “I didn't know they were counterfeit” is not an acceptable defense. It’s so easy to avoid the risk by not buying coupons online at all.

Bud Miller is the executive director of the Coupon Information Center, an industry watchdog group that assisted in this counterfeit investigation. “This case clearly demonstrates the dangers of purchasing coupons on the Internet, whether it is from independent websites, email or from online auctions,” Miller said. “Coupon buyers expose themselves to the possibility of becoming involved with counterfeits, stolen property or other criminal activities. They may also expose themselves to additional risk by providing their names, home addresses and financial information to organized crime rings.”

Jill Cataldo, a coupon workshop instructor, writer and mother of three, never passes up a good deal. Learn more about couponing at her website, jillcataldo.com. Email your couponing victories and questions to jill@ctwfeatures.com.