Apr 17 2014, 6:47am CDT | by Forbes
If you’re feeling flush and want to do your part for consumer confidence – say because you’re expecting a tax refund from Uncle Sam – shop carefully before blowing your wad on a luxury handbag, especially when buying online. Scams abound, and tend to proliferate like a hydra that keeps growing new heads.
Fraudsters are not only adept at making counterfeits look like the real thing (See “How To Spot A Fake Designer Handbag”). They also employ creative marketing strategies that exploit consumers’ buying habits. A recent federal indictment provides a window on how one Brooklyn, N.Y. ring seduced consumers for at least three years.
The indictment, in the U.S. District Court for the Southern District of New York, describes a scheme, operated through a network of websites that purported to offer authentic luxury goods – primarily handbags – at prices of up to $3,000. The websites advertised that the items were discounted because of slight manufacturing defects “infrequently noticeable to the consumer.” Hundreds of consumers who purchased goods from the sites either never received them or got counterfeits.
Deceived customers, who had paid by credit card, disputed the charges and got refunds from the company that processed the payment. Ordinarily that company would have charged back the amount to the merchant’s bank account. But the ring used various means to thwart those efforts.
All the suspects were arrested in early February and have since been released on bail. Joseph and Albert Mosseri, Oded Hakim and Elliot Shasho allegedly directed the scheme and managed its finances, while Andrew Li supplied counterfeit luxury goods.
The suspects were each charged with one count of conspiracy to commit wire fraud, substantive wire fraud, and trademark counterfeiting. If convicted, they could each face up to 30 years in prison. Their lawyers declined or did not respond to Forbes’ request for comment.
Joseph Mosseri has been a defendant in at least two other lawsuits accusing him of selling counterfeit handbags. One, filed in November by Chanel in the Southern District of Florida, is in the early stages. The other, brought in the same court by Louis Vuitton in 2010, resulted in a default judgment against him, which was affirmed in December 2013 by the 11th Circuit Court of Appeals.
These handbag makers and others would prefer that consumers buy the brand at one of their boutiques or at a department store counter. But a growing number of people looking for bargains will shop for these goods through online discounters like the ones that the feds recently targeted. The proliferation of online sites (the recent indictment alone mentions 10 of them) makes it easier than ever to get snookered. Some have professional sounding names; include pictures that look like the real thing (those photos may even violate copyright rules); and price merchandise so it seems like they’re discounting the real thing, rather than overcharging for a knockoff.
As with any online vendor you’ll want to consider how long they’ve been in business and how many previous customers there are. Be suspicious if the seller has plenty of stock in an item that’s sold out everywhere else.
Deborah L. Jacobs, a lawyer and journalist, is the author of Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide, now available in the third edition.
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