U.S. authorities arrested 10 people Wednesday on charges of smuggling $200 million worth of counterfeit goods from China, including false designer handbags and clothing. Similar arrest have been occurring in many major North American cities such as in Toronto, Los Angeles and Chicago.




A grand jury indictment accuses them of importing fake Nike shoes, Burberry and Chanel handbags and Polo Ralph Lauren and Baby Phat fashions that were sent directly to retail stores – not to the kind of sidewalk vendors, common in New York City, who might be expected to be dealing counterfeit goods.

From June 2006 until November 2007, the merchandise was smuggled in shipping containers through the port of Newark, New Jersey, disguised using fraudulent documentation, and delivered to stores in the New York area, the indictment alleges.

An undercover agent posing as an Immigration and Customs Enforcement agent was paid $500,000 in bribes.

“It is always deeply troubling when a criminal enterprise seeks to circumvent our port security, whatever the form of contraband and wherever the point of entry,” U.S. Attorney Michael Garcia, the chief federal prosecutor in Manhattan, told a news conference.

In June, federal prosecutors in Brooklyn charged 29 people in a separate case of smuggling counterfeit goods, also from China, worth $700 million.

This ongoing battle with counterfeit merchandise will forever exist as long as there is a strong demand for people willing to purchase counterfeit goods and as long as costs in China’s manufacturing advantage remains. The only persistent problem will lie in the hands of customs enforcement agencies and similarly to the War on Drugs, this will likely follow suit and fail in the long-term, impacting only the short-term supply.

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