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Top Luxury Brands Targeted in Counterfeiting Scheme

Some of the country’s top luxury brands have been the victims of an elaborate global counterfeiting and smuggling scheme, the Department of Justice said Friday.

A young couple makes a purchase at a Burberry luxury store.
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A young couple makes a purchase at a Burberry luxury store.

Federal agents were in the process of arresting as many as 26 people who have been charged in the scheme to produce knock-off goods in China and sell them in the U.S., the Department said.

A spokesperson told CNBC that the items mimicked by the alleged smugglers included Ugg boots, Timberland boots, Nike shoes, and Burberry scarves. Other brand names impacted were Gucci, Lacoste, Coach, Ralph Lauren, and Louis Vuitton.

If those goods had been authentic, their total value would have been as much as $325 million, the spokesperson said. Officials called it one of the largest counterfeit goods smuggling operations ever charged.

The scheme allegedly involved an interconnecting series of warehousers, distributors, and wholesalers all conspiring to import the phony goods to the U.S. and launder money back to China. The smugglers allegedly tried to bring the goods into the U.S. through Port Newark-Elizabeth Marine Terminal in Elizabeth, N.J.

The spokesperson said arrests were still ongoing in New York, New Jersey, and Texas as of about 10 a.m. EST on Friday.

The bust was made by a coalition of federal law enforcement agencies, each of whom had picked up on various aspects of the fraud on their own and who combined efforts once they worked out that there was a larger operation in play.

Federal officials have scheduled a noon ET press conference at the U.S. Attorney's Office in Newark to reveal more details of the operation and the arrests.

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