Rolexish

Here's a complicated scenario for ya.
My older, misguided brother gave me a Rolex for graduation - or so it seemed.
I was promised a "used, from Ebay, but still very nice" watch from said brother and when it arrived in the mail I was surprised to find a Rolex box with all the appropriate paperwork and a Rolex-looking watch. However, research has led me to believe that this watch is not a Rolex, but an excellent counterfeit (it actually works exactly like a real Rolex, so it was very difficult to distinguish.) My dilemma is how I should respond. There are a couple of scenarios here:
1. Brother bought watch on Ebay thinking it was a real Rolex.
2. Brother bought watch on Ebay knowing it was a counterfeit but hoping I'd think it was real.
3. Brother bought watch on Ebay fully aware it was a counterfeit and assuming I'd enjoy a Rolex "replica" (the nice word for fake).

A few other facts - Ebay does not allow the sale of fake Rolexes; my brother is known for extravagant gift-giving; my brother and his wife are not really well-off (bordering on poor).

So how does one respond? If Scenario 2 or 3 were true my response will be vague and effusive thanks. But if scenario 1 is true, would he like to know so he can get his money back, especially since money is rather tight at his house?

My husband thinks I should insinuate by, the next time brother asks for the time, answering, "Well do you want the REAL time???" but I think this would take way too much planning...especially since brotehr lives in another state.

I do have a sneaky way I could gather info. My brother's wife and my sister are pals (they used to work together and my sister introduced the happy couple). My sister may be able to get a little extra info out of brother's wife.
Gah, why does this happen to me?
ANd what exactly does one do with a very good counterfeit of a Rolex?