Yes fakes have been around for a very long time. At one time when the US watch industry was king, the Swiss made fakes of US pocket watches. The fact it has been going on for a long time doesn't make it right or make it harmless as you keep saying.
I'm not about to approach the NYC police (why would I since I don't live in the US), but what I won't do is condone fakes repeatedly as you are doing, and calling it a victimless crime. I'm sure you and your "peeps" are okay with this sort of thing, but that is a reflection of your ethics.
I have been in the unfortunate and uncomfortable position of telling someone who has spent a lot of money on a watch that it was a fake, not knowing that what they bought was a fake. I can tell you it's not fun giving that news and I'm sure a lot less fun receiving it. When someone finds out they have been scammed for thousands of dollars, and you keep saying that "no one should have an issue with it" well sorry but that's not going to fly...