A 45-year-old Chinese woman, Xu Ting, lives in a brown shingle house with a weedy driveway. She has been sued for counterfeiting by eight luxury brands, including Gucci and Louis Vuitton, and owes Chanel Inc. $6.9 million in damages. None of this has stopped her from becoming a legal permanent resident of the United States and achieving a comfortable suburban life.
China is not the only country with a counterfeiting problem. Most fakes are made in China, but they are sold in America. Counterfeiting is not a priority on par with drug smuggling or money laundering, and is rarely prosecuted as a crime. The lack of legal cooperation with China makes it easy for counterfeiters to move their money beyond the reach of Western law enforcement — and hard to root out counterfeiting kingpins. As long as counterfeiters can stay out of jail and hold on to their profits — and consumers continue to buy — the trade in fakes will likely thrive.
Despite spending millions on brand protection, companies often end up playing whack-a-mole, shutting down producers and distributors of fakes, only to see them pop up again. Xu Ting simply refused to show up in court over the years. Instead, doing graduate studies in statistics at San Diego State University, helped her family amass at least $890,000 in bank accounts back in China, and bought the $585,000 Rancho Penasquitos house with her husband, who has also been involved in selling counterfeit luxury goods, public records and court cases in China and the U.S. show.
“There’s a million ways to game the system,” said Dan Plane, an intellectual property lawyer at Simone IP Services in Hong Kong, who is not involved in litigation against Xu Ting. “Probably the only thing that’s going to stop her is when she passes away — probably on an island resort somewhere — or if she gets arrested.”