Hong Kong customs officials rounded up 10 suspected members of a counterfeit syndicate and seized HKD $10 million ($1.28 million) worth of fake products on Thursday at the city’s Ladies Market in Mong Kok.
The bust on the busy Tung Choi Street, which aims to shut down the largest illegal group that takes advantage of tourists, was the third operation by the Customs and Excise Department in the area this year. The bureau describes the seizure of fake watches, handbags and leather goods as the largest haul in a single operation in recent years, South China Morning Post reported.
Authorities have previously confiscated HK D $7.5 million worth of counterfeit items and arrested 12 people in two separate operations back in January and August. The syndicate has reportedly shifted to selecting potential customers, mainly U.S. and U.K. tourists, since the two arrests.
“The gang only served tourists from Europe and America,” Customs’ Intellectual Property Investigation (Operations) Group’s Guy Fong said. “They did not approach locals or Asian tourists in case they were undercover customs officers.”
Customs officials discovered last month that the syndicate was selling their fake wares at four hawker stalls in the market. After carefully spotting potential clients, sellers would use computer tablets to show photos of the products to clients.
“Some clients were taken to its upstairs showroom nearby, which was packed with about 600 counterfeit products,” Fong said. He added that the group used apartments as warehouses for the items.
Fong believes the consumers were aware that the goods, sold at 5-20% of the price of the actual products, were fakes.
The syndicate reportedly operates with a female ringleader who regularly purchases the counterfeit items from the mainland and a male leader who manages the local distribution.
Selling counterfeit goods in Hong Kong carries a maximum penalty of a fine of HKD $500,000 ($64,370) and five years in jail. The seven men and three women who were rounded up for questioning, however, were not charged.