Chinese banks a haven for web counterfeits

Kim Sbarcea knew exactly what she wanted. She typed "Tiffany Elsa Peretti mesh earrings" into Google and scrolled through impeccable photos of the delicate USD 450 diamond-shaped earrings until she chanced upon a pair for deal of deals! USD 32.
The website, tiffany-outletsale.Com, looked legit and Sbarcea assumed Tiffany & Co. Wouldn't let an unauthorised site use its name. Besides, she could pay by credit card. She hit the buy button.
In that instant, on a Saturday morning in 2011, Sbarcea's USD 32 was sucked from the living room of her house in Christchurch, New Zealand, into the global counterfeiting market.

The money trail left by counterfeiters almost always leads to China, where banks have emerged as key conduits in an illegal industry that by one estimate is expected to be worth USD 1.8 trillion this year.
At least three prominent Chinese banks serve as safe havens for counterfeiters, who use them to process credit card payments for fakes or move their money around the globe, The Associated Press has found.
A review of hundreds of pages of court documents from cases in the United States and China, along with interviews with lawyers, investigators, government officials and industry representatives, shows that a lack of legal cooperation between the West and China is allowing counterfeiters to use Chinese banks as financial shelters.

Recent attempts by US and European companies to follow counterfeiters' money into China have hit a wall, frustrating efforts to deal a more decisive blow to the global trade in fakes, which has endured despite years of raids.

Five lawsuits filed in the US against counterfeiters reveal a pattern to how they use Chinese banks to move money beyond the reach of US law enforcement.
Counterfeiters sold fakes online in the US, using credit cards or PayPal to process payments. Then, records show, they transferred millions of dollars in illicit earnings to accounts at two of China's largest state-owned banks, the Bank of China and the Industrial and Commercial Bank of China, as well as the smaller China Merchants Bank.

The banks do not dispute that the accused counterfeiters held accounts at their branches, but they refuse to comply with US court orders to disclose information or freeze the funds, saying that would violate Chinese bank secrecy laws.
They say they do not support counterfeiting, have broken no laws and are caught in a jurisdictional dispute between China and the US.
Tiffany & Co seeks USD 58.5 million in damages in a New York federal court from an online counterfeiting ring that spans three continents. Tiffany said it traced PayPal transfers to five accounts at the Bank of China, ICBC and China Merchants Bank, and also found that the Bank of China was processing credit card payments for one defendant. A Latvian bank handed over details about the illicit money flows, but the Bank of China refused to cooperate, US court documents show.

Gucci seeks USD 12 million in damages in a New York federal court from a counterfeiting ring it says sold millions worth of fake handbags and wallets to US consumers.