N.Y.'s Chinatown has knockoff items - but they're top secret

NEW YORK - It's become as much a part of Chinatown's reputation as dim sum, but the trade in counterfeit fashion has been driven underground.

Once hawked openly from dozens of Canal Street's ramshackle stalls, the fake Louis Vuitton and Prada purses, the Tag and Rolex watches, have gone.

But a New York Daily News investigation found they haven't gone far, forced into a secretive criminal empire filled with locked back rooms, passwords, well-placed lookouts and gang members linked by walkie-talkies.

"No designer, no designer." The cry was almost deafening as tourist after tourist tripped off what must be Canal Street's most-used words: Gucci, Prada, Louis Vuitton.

Everybody seems to want them. Nobody wants to be seen selling them.

Illegal counterfeits - products made to look exactly like genuine designer goods and sold at a fraction of the price and quality - cost New York City more than $1 billion in lost tax revenue last year, city Controller William Thompson estimates.

Faced with such a huge deficit, a major crackdown on forgeries has pushed many fake "designer" labels off the shelves.

But the New York Daily News found several dealers are still connected to the illegal trade, and complex networks have been organized to cover their tracks.

"Try one of the store owners on Broadway," said one "designer"-free shopkeeper, a walkie-talkie already in his hands.

A salesman in that store told a reporter, "There are two women standing outside Starbucks at Canal and Centre Streets They might know."

The pair was easy to spot. One stood in a puffy jacket, hands in pockets, not looking particularly friendly, chatting in Chinese to her companion. They acted dumb at requests, offering an umbrella to keep off the pouring rain, but nothing more.

But it took only a couple of minutes to gain their confidence.

A crumpled, laminated sheet of paper was pulled out of the puffy jacket pocket and offered. It was covered with tiny pictures of Louis Vuitton purses.

"Lots of Louis," she said. "You follow me?"

So began a dash through the maze of north Chinatown. The diminutive woman marched through the rain, her companion crossing the street and constantly watching for followers behind. At least one man, standing scanning the foot traffic at a crossroads, nodded as they passed.

The guide led our reporter into a shopping mall passageway a few blocks from Canal Street, stopping by a door covered by metal pull-down shutters.

The shutters were rolled up, a door unlocked and, as it was locked again, a room packed full of counterfeits - mainly Louis Vuitton, Coach and Christian Dior purses, along with DVDs of movies still selling out theaters - was exposed.

A replica Louis Vuitton purse was bought for $40. A real one would cost $1775.

It seems these well-hidden hauls of illegal products have become common.

"I was asking and asking for Gucci and Prada, and nobody knew anything," said Shelley Blair, 31, a tourist from Oklahoma City.

"Then this woman with a baby stepped forward and said, `I know where you can get some.' She led me a few blocks away, unlocked this door and took me inside. Somebody else locked the door behind me and said, `Now you are safe.' The room was full of bags.

"It was weird. I was following this woman and thinking, `Where is she taking me?' "

Most Canal Street stores visited by the Daily News last week claimed not to sell gear bearing names of the biggest fashion houses - even when a reporter uttered a password sources said would open up a secret Aladdin's cave of contraband.

But extended efforts showed the ease with which counterfeits still can be found.

Despite protesting that the cheap, unnamed bags on display at a Canal Street store were all that was stocked, two assistants were eventually persuaded to nervously pull out discreet Louis Vuitton and Coach catalogues.

An ordered purse - designed to look like a Coach and bought for $38, compared with the $278 price tag for the genuine article - appeared from a back room, already packaged.

At another store, a vendor checked his empty shop for hidden customers before peeling back an unknown brand name from a leather bag to show Prada stamped proudly underneath.

But many sellers do seem genuinely "designer" free, including one who said, "We don't sell any at all," a look of regret in her eye as she turned away business.

Tim Trainer, president of the International AntiCounterfeiting Coalition, said, "Forcing this gear out of public view is the first step in drastically reducing the problem.

"I have seen this happen before in a place in Hong Kong. The authorities put pressure on for two years and the whole thing was driven underground.

"Canal Street is still one of the worst places in the country for counterfeits, but New York City, the police and the designer companies have realized the extent of the problem, and they're taking huge steps to crack down on it."

He said hefty fines and, in more serious cases, lengthy jail sentences can be imposed for selling counterfeits - which often funds other criminal activity.

A spokeswoman for the Manhattan district attorney's office said, "We have taken a lot of action, and it will continue.

"This is the result of months and months of work, which now appears to be paying off."

Police declined to comment.

"Members of the public think they're doing nothing wrong when this stuff's on show in the stores," Trainer said.

"When they have to go into locked back rooms, then they realize this is something bad, that this is not a legal transaction and it's not safe. Then the market severely declines."

A middle-aged man carrying a plastic bag full of counterfeit purses bent to whisper to a shop assistant as he left a Canal St. store with his wife last week.

"Isn't this illegal?" he said.

"No, no, no," she replied. "Of course not."

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