Police accuse retailer of fraud for selling fake brand items

When you buy a Louis Vuitton handbag for your spouse on closeout for $19.00, you better check again before you get embarrassed giving a fake that's only worth $1.99! This is a serious kind of retail fraud taking place in Louisiana, according to the state's Attorney General. Officials raided a Baton Rouge clothing store recently and confiscated about 3,000 counterfeit pieces with allegedly fake labels.

They said that the confiscated items had a total value of over $1 million, which apparently refers to the value if the labels were legitimate. The products include purported designer clothing, shoes and electronics. The owner was being held at the East Baton Rouge Parish prison for the white collar crime of illegally using a counterfeit trademark, and was incredibly being held without bail at last report.

The raid was handled jointly by the U.S. Immigration and Customs Enforcement Office and the Louisiana Attorney General's Office. In an apparent defensive move, officials tried to intensify the importance of the raid by saying, without proving, that the sales proceeds of these items go into the black market to finance illegal activities.

Despite all of the fanfare, Louisiana prosecutors will nonetheless have to prove that the accused knew that the items were frauds. Specific intent and knowledge of a material falsity is generally required to prove criminal fraud. Also, it can be argued that people don't generally mind paying $25 for something that purports to be worth far more, which works against finding specific intent to defraud.

Are customers participating in a fraud by buying obviously falsely-labeled products? Should the customer be arrested for showing off her purported Vuitton handbag that she knows and appreciates is a fake? That defense is met by prosecutors' unproved speculation that the proceeds are funneled into illegal activities.

In Louisiana, criminal fraud requires proof of knowledge of a material falsity and specific intent to defraud. However, if people know that the labels are not genuine or don't really care, is intent to defraud really possible? In any event, with questions like that on the table, his best option at this point is to consult with defense counsel and discuss all of the facts thoroughly so that a strong defense strategy can be prepared.

Source: the advocate.com, BR store owner arrested in sale of knockoffs," Jim Mustian, May 31, 2013

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