More than 1,700 counterfeit poppy products, including pendants, earrings and badges, have been seized from a wholesaler.
The items were discovered by trading standards officers during a routine inspection in Cheetham Hill, Manchester.
Some of the products were emblazoned with "Lest We Forget".
Manchester City Council declined to indentify the business concerned due to an ongoing investigation.
The Royal British Legion said it was a "sad fact" that there were people who would "actively defraud the public" of money intended for veterans and their families.
Rabnawaz Akbar, the council's executive member for neighbourhoods, said he encouraged residents to be "vigilant".
"It is absolutely appalling that counterfeiters would sink to the depths of creating fake poppy merchandise, to try to exploit the public's desire to support members of our Armed Forces community," he said.
The Royal British Legion said the public should purchase poppy products only through official channels.
Director of fundraising Claire Rowcliffe said: "We want to make sure that it goes to supporting those who have made such a unique contribution to our society."
An investigation to find the source of the counterfeit products is ongoing, the council said.