- Rachel Tashjian
How Fake Sneakers Get To America
Counterfeit sneakers are a $450 billion market—a menace to the economy, generally, and intellectual property rights more specifically. But the world of fraudulent goods remains a highly opaque one, from the manufacturing process to the retailers that stock them: it’s often easier to buy a pair of fakes than it is to learn where they come from.
A federal complaint unsealed late last month (and first reported on by Quartz) shows how counterfeit sneakers, like Nikes and Louis Vuittons, come into the United States, revealing an elaborate system of fraudulence, burner phones, and helpless importers of decorative glass vases and napkins.
Between February 2012 and December 2016, the United States Department of Homeland Security reports, a Chinese national, Qing Fu Zeng, smuggled 22 40-foot shipping containers by sea, depositing them in ports in New Jersey, New York, and Los Angeles. The manifests for these containers stated that they were packed with napkins or glass vases, but x-rays and law enforcement examinations revealed that they were in fact filled with “shoes consistent in appearance with Nike and Louis Vuitton sneakers.” The investigators worked with authorized representatives of the brands to confirm that they were indeed counterfeit. Had they been real, the complaint reads, they would have been worth more than $472,000,000. The sneaker market: huge. The fake sneaker market: perhaps even huger.
The process of bringing the sneakers into the United States required a web of fraud, and a network of complicit retailers and interlocutors throughout the New York area and in greater Los Angeles. The original complaint, which was unsealed upon Zeng’s arrest on December 26, at Dulles airport in Washington, D.C., explains in detail how “Ray,” as Zeng’s associates called him, would ship containers of the counterfeit sneakers to both coasts from China. Zeng illegally obtained Employer Identification Numbers (EINs, or the numbers the IRS uses to identify businesses), and listed those legitimate businesses as the consignee or buyer of the goods on the shipping manifests, but provided false contact information that led to burner accounts owned by Zeng.