Chinese police bust fake Louis Vuitton bag network

Police in China have shut down a criminal network that counterfeited millions of dollars-worth of  Louis Vuitton bags, making nearly 40 arrests.

The gang are suspected of being in operation for at least four years, and were carrying out a sophisticated scam that involved adding near-field communication (NFC) chips to the knock-off bags – a feature that isn’t present on the originals – in order to allow customers to “authenticate” their purchases, according to a report in Thepaper.cn.

The counterfeiters – based in in South China’s Guangdong Province – were in some cases able to produce copies of Louis Vuitton bags that hadn’t even been launched onto the Chinese market yet, according to the report, which suggests they made more than $15m from the scam.

The network bought genuine bags and then reverse engineered the counterfeits, according to the report. They also lined up suppliers for copycat versions of Louis Vuitton branded dust bags, warranty certificates, labels and other items.

The South China Morning Post said that the bags cost $15 to $30 to manufacture, ad were sold to dealers for $45 to $75 who then sold them on to the public with a 40 per cent mark up.

It’s the second major operation against the network in the last few months. Last September, Xinhua reported the arrest of 62 suspects after a six-month operation.

At the time, police said their investigation started after they discovered the counterfeit bags being sold on the WeChat social media app.