It seems that NY state has a whole section of business law that protects the consumer from being sold non-kosher Mezuzahs and Tefillin.
Here is a link to the section Just type Mezuzah in the search box and it will come up.
Pretty amazing huh?
Thanks to xerpentine for the tip.
http://mezuzahstore.com/blog/index.php/2008/12/24/this-guy-sold-a-passul-mezuzah-in-ny-state/
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It makes me proud to be a New Yorker!