11 in San Francisco charged with trafficking in knockoffs worth millions

By Jerry Markon
Washington Post Staff Writer
Tuesday, August 3, 2010; 4:15 PM

The operators of eight shops in San Francisco's Fisherman's Wharf district have been charged with trafficking in counterfeit designer apparel and accessories worth millions of dollars, officials said Tuesday. They said the arrests are the largest federal enforcement action against knockoffs ever taken on the West Coast.

Authorities seized nearly $100 million in clothing, handbags, wallets and other counterfeit merchandise illegally imported from China, according to San Francisco U.S. Attorney Joseph P. Russoniello and customs officials. The items bore the labels of more than 70 well-known brands, including Nike, Coach, Kate Spade, Armani and Louis Vuitton.

Officials said the eight merchants, along with three sales clerks, were charged in U.S. District Court in San Francisco with conspiracy, smuggling goods into the United States and trafficking in counterfeit goods. The 25-count indictment was filed July 22 and unsealed Monday.

"To consumers who think designer knockoffs are a harmless way to beat the system and get a great deal, 'buyer beware,' " said John Morton, director of U.S. Immigration and Customs Enforcement. "Trademark infringement and intellectual property crime not only cost this country much-needed jobs and business revenues, but the illegal importation of substandard products can also pose a serious threat to consumers' health and safety."

Experts say the problem of trafficking in counterfeit goods has mushroomed in recent years with globalization and the lowering of trade barriers. Among the leading fake items are designer handbags.

Even though it is a crime to sell such trademarked goods -- although not to purchase them -- enforcement has generally been spotty. Police have other priorities, and federal prosecutors take only the biggest cases.

But the Justice Department and ICE have been cracking down in recent years; the charges in San Francisco are part of a larger effort by Justice's Intellectual Property Task Force, which was created by Attorney General Eric H. Holder Jr. to combat the growing number of domestic and international intellectual property crimes.

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