Wharf merchants busted in fake goods raid

August 4, 2010 9:32:35 AM PDT
Federal agents have broken up a massive counterfeit ring at Fisherman's Wharf in San Francisco that trafficked in fake designer goods. Nearly a dozen business owners and employees were indicted in the largest counterfeiting investigation ever conducted on the West Coast.

A real Gucci bag may cost $1,000. You can buy a good fake for maybe several hundred dollars or cheaper. Knockoffs are big business, but they are illegal and federal law enforcement officials want traffickers to know they are going after them.

"These are largely high-end luxury items, high-grade counterfeits that were being sold for a fraction of their costs," explained U.S. Customs and Immigrations Director John Morton. "We ultimately seized 200,000 individual counterfeit items representing 70 different manufacturers both foreign and domestic."

Dooney and Burke, Coach, Rolex, Versace, Prada, Dolce and Gabana, nearly $100 million of knockoffs seized from stores at Fishermans Wharf. Eleven shop owners and store clerks were arrested. Four are Chinese nationals, two of them in the United States illegally.

The investigation started two years ago when federal agents discovered a suspicious container at the Port of Oakland.

"When we opened that port container up, there were 50,000 counterfeit items being shipped under false shipping invoices and documents," Morton said.

The knockoffs were to be delivered to a gift store on the 400 block of Beach Street. Agents from ICE began an undercover operation, making buys of counterfeit goods and raiding more than half a dozen stores on the Wharf in the past two years.

Agents arrested the eleven suspects on Monday. U.S. attorney Joe Russoniello says they face serious charges,"20 years for smuggling, 10 years for trafficking, 5 years for conspiracy... pretty heavy."

Two stores were still closed Tuesday, but most of the eight shops which agents raided were already back in business. Employee either refused to talk about what happened or said they knew nothing about the raids and arrests.

This is the biggest federal action in San Francisco against counterfeit trafficking since 2007, when 100 agents raided eight antique and art stores on the Wharf and Union Square, making dozens of arrests and confiscating fake merchandise.

Federal officials say most of the knockoffs come from China. ICE Director Morton says he is going to Beijing next month to talk with Chinese officials about the growing problem. Morton says one big market for knockoffs is the internet, which is almost unstoppable.


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