Phony goods hawkers tap luxury hotels for credibility

Nine people have been sentenced to as much as one year in prison for selling counterfeit brand merchandise out of high-end hotels, a district court said Friday.

The case puts a new twist on the business of selling counterfeit goods. Unlike many hawkers of such wares, who typically operate on the street or out of labyrinthine indoor markets, the nine defendants sold their products at fake trade fairs they orchestrated in hotels. The locations lent an air of credibility to the defendants and their products, according to a press release from Yangpu District People's Court.

The defendants, who were 20 to 31 years old, were each charged with selling counterfeit goods, including shoes, clothing, electronics, food and medication, the court said.

The major defendants, surnamed Guo and Ji, started buying counterfeit products bearing the labels of popular brands such as ECCO, Columbia and Clarks in January. They purchased the goods from manufacturers in Fujian and Guangdong provinces.

The court said they sold the goods at a steep markup. For example, they bought pairs of shoes for 50 yuan ($8.24) each and sold them at 280 yuan.

The other defendants involved in the case were in charge of looking for space at five-star hotels in Hongkou and Minhang districts. To advertise these events, they purchased black market devices that send out text messages to all mobile phones in a specific area.

In June, the Shanghai Administration for Industry and Commerce found that the defendants were selling counterfeit goods at a five-star hotel in Hongkou district. Police later arrested the defendants at the InterContinental hotel in Pudong New Area.

The court sentenced Guo and Ji to one year in prison and fined each individual 20,000 yuan. The other defendants were sentenced to seven months in prison with fines ranging from 6,000 yuan to 8,000 yuan. The court has dealt with 105 cases involving the sale of counterfeit goods this year, accounting for about 76 percent of its intellectual property cases.