Tribeca Trib

Chin Renews Push to Punish the Buyers of Phony Goods

Tourists shopping for knock-off handbags near Canal Street. Photo by Carl Glassman/Tribeca Trib

Chin Renews Push to Punish the Buyers of Phony Goods

By Aline Reynoldspublished by The Tribeca Trib, July 1, 2013

Counterfeit goods—from $60 Louis Vuitton bags and $50 Rolexes to $5 DVDs—are a perennial tourist trap around Canal Street, but those who take the bait could soon be punished. As Chinatown’s counterfeit industry continues to thrive, area residents and others are calling for the passage of a law now being considered by the City Council that targets the purchasers of phony goods. At a Council hearing last month, a handful of Tribeca residents and lawyers testified in favor of the proposed law, which would penalize a buyer of fake merchandise with a $1,000 fine and up to a year in prison.

John Hagen, who lives at 45 Lispenard St., between Church and Broadway, claimed the counterfeiters are “ruining” his block. Hagen and other nearby residents believe the new law could end the dealing that they say is diminishing their quality of life. “I get out of my house every day and walk right into it,” he said of the bag sellers who line a corner of his block, near Canal Street. “I really want this to stop.” Cathy Haft, who lives at 395 Broadway, two blocks south of Canal, regularly calls the police to report the illicit activity that she says is “killing” her neighborhood.

“The First Precinct is wonderful,” Haft said, “but, frankly, there’s no way they can keep up with the amount of phone calls I, myself, make. They need help, and I think this law would really do that.” “If there is a consequence,” she added, “that [the tourists] will care about. I would personally just love to see a few of them arrested.”

Chin believes the proposed law—languishing without a hearing since 2011, when she introduced it—would stem the demand for the merchandise. Currently, the sale of knock-off goods cheats the city out of an estimated $1 billion annually in taxes, according to a report from the city comptroller’s office.

“We need to deter people from purchasing these items,” said Chin, noting that the law would give cops an “extra tool” to combat street transactions. “We cannot keep trying to tackle this problem in the same way, because it’s not working.” While declining to comment on the proposed law, First Police Precinct Commanding Officer Brendan Timoney said his officers are on the lookout daily for illegal vendors on Canal Street. “We’re relentless on this,” he said. “Between us and the Fifth Precinct…we’ve confiscated a ton of fake bags.”

The local enforcement, however, typically results in just a few arrests per day, he noted, since the cops can only make an arrest when they witness a sale, and the peddlers are often successful in hiding the transactions. “It’s sort of a game—once we make an arrest,” explained Timoney, “[the other peddlers] shut down their operation.”

Although counterfeit sellers can face up to 15 years in jail, depending on the goods’ total value, roughly three-quarters of 659 Canal Street arrests made last year resulted only in misdemeanor charges, according to the Police Department. (No information was provided on the number of arrests that resulted in jail time.) The city’s Office of Special Enforcement, which oversees raids and other counterfeit enforcement tactics, opposes Chin’s law. The office’s director, Kathleen McGee, claimed in her testimony that it would hurt the city’s retail industry.

“While we share the Council’s frustration with consumers’ misguided support of criminal enterprise,” she said, “we are unable to agree with the approach taken by the bill. We are concerned that enforcement of such a prohibition could deter both New Yorkers and tourists from shopping for legitimate goods.” In an interview outside his shop, the owner of an electronics store, near Church Street, agreed that the bill would hurt legitimate businesses like his.

“What you’re proposing is that a tourist who saved his money to come here and visit New York City and has heard about Canal Street is going to get arrested,” said the owner, who declined to give his name. [What] is that going to do for our tourism? It’s going to make it even worse.” As it is, he said, his business is down 50 percent because of the daily congregation of counterfeit vendors in front of his store’s entrance. “It’s very intimidating, and [tourists] don’t like it,” he said.

As an alternative to penalizing the buyers, McGee suggested a new public awareness campaign to better inform tourists of the illegality of the trade, along with its funding of terrorism and human trafficking and the dangers posed by certain low-quality knockoffs. (Some imitation perfume reportedly has been found to contain contaminated alcohol and even urine.)

Joseph Gioconda of the Gioconda Law Group, which specializes in intellectual property law, testified that an awareness campaign alone would not end the thriving, illicit industry, as previous blitzes have proven ineffective. In 2009, the city installed posters carrying anti-counterfeiting messages in Times Square and Chinatown to commemorate that year’s “World Anti-Counterfeiting Day.”

“I think what surprised a lot of people is that it didn’t even make a dent. [The counterfeit business] continued to spiral out of control and skyrocket, even in the face of these public service campaigns,” Gioconda said. “And no body’s really clear exactly who should be fitting the bill to pay for the public service campaign.”

In response to ideas brought up at the hearing, Chin agreed that the proposed legislation should call for harsher penalties, such as jail time, only to resellers who buy in bulk—and levy fines of around $100 to tourists who purchase a single item. She said she plans to discuss the proposed legislation this month with the Bloomberg administration. And what do the tourists think about it?

Several buyers who were approached by a reporter refused to discuss the prospect of being fined. A woman from St. Augustine, Fla., who giddily told her friends that the bag she had just gotten for $80 would be at least $2,000 in a store, said that she didn’t really want to think about that possibility. “We’re really having fun,” she explained.

WE CHECK OUT THE “DEALS”

Last month, the Trib’s Aline Reynolds and Carl Glassman set out to see what tourists experience when they make contact with the sellers of counterfeit goods. In the course of one hour, they had entered into separate transactions (but no purchases) with vendors of handbags, watches, sunglasses and DVDs. Here are three of those encounters, as described by Reynolds.  

‘If You Want It, Get It Now’

First, we met one of the many African bag sellers who stand on Canal Street, west of Broadway. Having expressed interest in a Louis Vuitton bag—“it’s not the real one but a good one,” he said—he lowered his price from $100 to $60 within seconds.

“If you go to the store,” he said, “you’re going to buy it for $300 or $400.”

Pretending to be intrigued, I scanned one of those ubiquitous, single-sheet catalogs showing dozens of knock offs in every color. I asked to see two of the bags.

“Which color you want?”

I told him a brown one and a white one. “OK. Wait here.”

Following a brief phone call the man disappeared into the crowd, soon returning with two black garbage bags. He handed them to a partner, who lifted each of the bags halfway out to show me.

“I thought it was all white,” I said, looking at the white checkered one and pretending to be disappointed.

“What kind of material is it?”

Instead of answering the question, he said, “If you look at the real one and this, you’re not going to tell the difference.”

“Is it leather?” “Yeah, yeah,” he assured me.

I hesitated, saying the bag looked different from the one shown in the catalog. I asked if I could come back later.

“If the police come out, we going to move,” the second man said. “So if you want it, get it right now.”

They both seemed unfazed by my decision to think about it. “Ok,” the first man said.

“It’s up to you. I’m here, anyway.”

In a Baxter Street Courtyard

“All the way down,” said the woman standing near the corner of Centre and Canal. We had stopped to find out about the DVDs she was peddling.

All the way down meant rushing to keep up with her as she zigzagged along the crowded sidewalk to Baxter Street.

Then, nearly jogging, we continued down to Bayard.

The woman led us into the gritty, red-and-green hallway of a tenement at 102 Bayard Street. “Do we stay here…we come?” I asked.

The hall led to a small, sunny courtyard with shirts and pants hanging from a makeshift clothesline and at least half-a-dozen garbage cans. The woman rushed through a door on the other side of the courtyard and immediately reappeared, holding a red plastic bag full of DVDs. We looked over a handful of them. “The Great Gatsby,” “21 and Over,” “The Big Wedding” and other familiar titles as the speaker on her phone crackled and she answered back.

Getting off the phone, she turned to us, breathing heavily and looking anxious.

“How much are they?” I asked.

“Five dollars.”

“Could you give them to me for $3?”

She hesitated, then replied, “Five for $20, OK?”

I said we didn’t have the cash and made a quick exit.

Bags in a Back Room

Back on Canal Street, a man handed me the usual catalog showing dozens of handbags. I said I was interested but wanted to see one first.

The man shook his head, abruptly took the catalog from my hand and gave it to a tourist in search of a Louis Vuitton purse. Instantly, another vendor appeared next to me, showed me the bag she was wearing and offered to get me the same one for $50.

“Where are the bags?” I asked her. “You don’t have it here?”

She motioned for us to follow her across Canal Street. Soon we were passed off to another woman who we would follow. Looking straight ahead and ignoring my questions, she rushed up Centre Street and, almost to Grand, dropped us off in a nondescript storefront, its shelves filled with a jumble of cheap odds and ends, from umbrellas and batteries to dolls and stocking caps.

Silently, a man took us behind a rear display and through a back door. There,in a tiny room, scores of knock-off bags hung from the walls, from floor to ceiling—purses small and large, firm and flexible, of every color and designer label.

“Oh, look—they have Prada,” I said.

“How much are these?”

“Sixty dollars,” he muttered. A Michael Kors bag? $55.

“Are they real?” He raised a hand and smiled sheepishly.

“Sorry, no English.”

I told him I only had $10 and we were out of there.