Counterfeits of top-name luxury brands have exploded on the world market in recent years.
Frederick W. Mostert
From the Print Edition:
Armand Assante, Mar/Apr 2008
In an unglamorous garage in London stands a fake Ferrari 1967 P4. The P4, Ferrari lovers assure me, is one of the world's most beautiful cars, with all the curves in the right places, as well as one of the most expensive models in the Ferrari stable, with an estimated value today of $15 million. Only three were ever made, but I own a fourth one. Luxury fakes are my dubious specialty, which is why I know that the fourth example of the P4 is absolutely a fake. In the course of my work, I have managed to meet with New York Police Commissioner Ray Kelly, President José Manuel Barroso of the European Union and high-kick wizard Jackie Chan. On each occasion, I dressed to impress. I paired my Armani suit with an Alfred Dunhill shirt, Versace tie, Ferragamo belt, Louis Vuitton shoes and Givenchy socks. The commissioner wanted to arrest me, the president thought I was certifiable. And Jackie tore my outfit to shreds, kung fu style, and left me to face the press in my underpants. My entire outfit was fake, and these gentlemen do not take kindly to counterfeits. Neither do I. (The Jackie Chan episode was just for show, of course, to emphasize just how pervasive fakes have become.) For the last 20 years my job as an intellectual property lawyer has taken me from Paraguay's Ciudad del Este to Guangdong Province in China to Manhattan's Canal Street as I search for pirates of luxury goods.
Counterfeits are often associated with the shady street vendor, peddling imperfect copies. But in the last 18 months I have witnessed a paradigm shift in the manufacturing of fakes. It is still only a ripple—but it is set to become a tsunami. The next wave will change the face of manufacturing and retailing and it is fueled by a quantum leap in technological engineering.
The real story about that shift in counterfeits begins, in some ways, with the curvaceous Ferrari. I first learned of her existence after our investigators were tipped off during an investigation into counterfeit watches in central Thailand. Instead of timepieces they found fake Ferraris, Lamborghinis and Lotuses. Hogwash, I told the lead investigator upon receiving this report. Counterfeit supercars? Not possible. Their pride at stake, the investigators returned to the workshop in the dead of night and sneaked a series of eye-popping pictures, which they sent to me in London.
I was intrigued. As a "petrol head" I felt bound to broaden the scope of the probe and asked the investigators to try to track down other cases. I found a factory in northeast China, which claimed to produce modern sports cars. Could they manufacture me a Mercedes SLR, I asked—even though it was not listed in their full- picture catalog? Within three days I received a reply: no problem. I decided to raise the bar. How about a Maybach? The answer came back two days later by way of a question—would I like a long or short wheelbase? But here's the deal with these fake cars. The gas tank could explode, the brakes might fail, the steering wheel is rickety and, I am sad to report, the famous Ferrari Red on my P4 is starting to peel, which of course would never happen on the real thing. (By the way, I should make it clear that conscience keeps me from driving her, as well as the certain knowledge that my boss would kill me should I give in to the temptation of taking the lady for a spin.)
The counterfeit world has traditionally been a world of the shabby and shoddy. But things are changing. Take sophisticated mechanical watches. Recently I joined in on raids on warehouses in China where I witnessed fake Rolex, Audemars Piguet, Vacheron Constantin and Jaeger-LeCoultre watches being manufactured on the factory floor. These were of such high imitation I could not discern them from the real thing. When we took the illegal copies to specialist watchmakers, in many cases it was only after opening up the watches and examining the movement with specialized equipment that a determination could be made as to their authenticity. But—and this is the worrying bit—even the highly sophisticated core components of luxury watches, such as tourbillons, can now be replicated almost flawlessly. Personnel from service centers increasingly tell stories of customers returning watches for repair, only to discover that they are bogus. Awkward, if not painful, situations arise: irate girlfriends and aggrieved wives swearing vengeance on boyfriends and husbands for buying them cheap knockoffs.
The term "true original" is often overused, but high-quality Cuban cigars surely qualify. Or do they? It is estimated that as much as 90 percent of Cuban cigars in the United States are counterfeit. It is probably fair to say that the embargo on Cuban cigars plays into the hands of Internet traders who con desperate cigar lovers. Because of the status that Cohibas Esplendidos, Romeo y Julieta Churchills and Montecristo No. 2s enjoy, they are high on the list of counterfeited cigars. An abundance of good rollers and the emergence of counterfeit factories in Central America, as well as the uncannily close imitation of authentic-looking Cuban cigar boxes, have muddied the waters even more.
And yet another of life's luxuries is under threat: vintage wine. Wine is increasingly becoming the target of counterfeiters who copy bottles and labels to perfection. And even by the ample standards of pirates, the profit margins are staggering. Only a few months ago a Bordeaux wine merchant was accused of selling plonk under labels from top-notch châteaus: Pichon-Longueville, Léoville Barton and Gruaud-Larose among others. The depth and enormity of deceptive vintage labeling was also spectacularly revealed when billionaire wine collector William Koch filed a federal lawsuit against Zachys Wine Auctions and collector Eric Greenberg over the authenticity of wines he purchased at auction. It says much of the dire current climate that even Château Petrus owner Christian Moueix indicated that he has spoken to the FBI about fraud.
Wine, cigars and now...truffles. As a hopeless foodie, I was deeply offended to learn that the pride of France—the prized black Périgord truffle—has come to suffer at the hands of counterfeiters. Crafty dealers import the common tuber sinensis from China's Yunnan Province to sell in the land of culinary elitism. The impostor truffle may seem remarkably similar on the outside to its more illustrious cousin (tuber melanosporum), but is by far lighter on the palate. A similarly deceptive tactic was employed in the United States to sell fake caviar, and led to the owner of Connoisseur Brands serving a term in prison for trading in counterfeit Russian sevruga. The fake sevruga turned out to be fish eggs of the humble American paddlefish. Your taste buds may give you an indication that all is not well, but it is sobering that both fake truffles and caviar are so authentic-looking that they can only truly be detected by full DNA testing.
To round out the list of high-end knockoffs, here is one for the golfers. The next time you think your swing is "unbalanced" or your ball is going everywhere, you may want to check out the authenticity of your gear. My growing collection of fakes—referred to in the office as the Hall of Infamy—includes a nifty set of fake Callaway clubs and a tray of counterfeit Titleist golf balls.
So why is there such a sudden surge and vast proliferation of almost copy-perfect fakes in the last 18 months?
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