Drop the Gucci, and put your hands up!
Councilwoman Margaret Chin wants to make it a crime to buy sham Chanels, pirated Pradas and other counterfeit handbags in Chinatown.
The Manhattan Democrat’s bill would slap tourists and bargain hunters caught buying designer fakes with a maximum $1,000 fine and up to a year in prison.
Chin and lower-Manhattan residents are petitioning for a hearing on the measure, saying Canal Street peddlers are spilling into side streets to harass anyone passing by.
“People think it’s an adventure,” Chin told The Post. “If you want to get these name-brand knock-offs at a cheap price, you go to Chinatown.
“It’s always illegal for people to sell, but it’s not illegal for the people who buy this stuff,” she added. “Hopefully, this law will cut down on the demand.”
Chin says label lovers, aided by city guidebooks and tour buses, know they’re buying knockoffs.
“People are worried that some innocent middle-aged woman might unwittingly purchase a [counterfeit] bag,” she said. “If you go into a back room, basement or van, you probably know what you’re doing is not legal.”
Last month, NYPD cops seized more than 1,000 fake bags from an underground shop, Chin said.
But as lawmakers seek to bring more heat and undercover cops crack down, black marketers have adjusted their tactics.
Today, paranoid peddlers rarely lead tourists into stores, through narrow hallways and into secret rooms, where fakes once lined the walls.
Instead, they’re making stealthy transactions on the street with the help of a network of lookouts. To get a mock Michael Kors, a buyer must first troll Canal Street — finding a scout with a low voice repeating “handbag, handbag” and “watches, watches.”
The scout leads buyers around the corner to a quieter street, where another member of the ring presents a pamphlet showing tiny color photos of more than 100 replicas.
Buyers point to their selections, and the seller disappears before muttering the jacked-up price: $100 or more. Minutes later, he returns with the fakes concealed in black plastic bags, grabs his cash and walks away.
Dana Thomas, author of “Deluxe: How Luxury Lost Its Luster,” says: “The counterfeit industry is very similar to the drug trade. It’s something that’s illegal, smuggled into the country and sold at an enormous profit. It’s not a victimless crime.”
There’s no estimate of how much revenue luxury brands lose to black-market bags, but agents with US Customs and Border Patrol seized $511 million in fake handbags last year alone. Of that, $340 million worth of forgeries were gathered by New York agents in 458 seizures.
China accounted for 72 percent of US Customs’ handbag busts last year. Several years ago, Thomas says, she witnessed police raid a factory in Guangzhou, China, where children were employed for a paltry $60 a month.
A factory can pump out hundreds of thousands of bags for less than $2 apiece. The counterfeits are sold to distributors, who smuggle the goods in US-bound shipping containers, planes and express mail.
Street-level sellers buy the items directly from manufacturers or through middlemen, who experts say are becoming less common with the rise of online ordering. The peddlers typically pay $10 to $30 a bag and sell them for $50 to $100.
When federal agents busted a major counterfeit warehouse in Maspeth, Queens, last month, they discovered 1,400 cartons of fake bags, sunglasses and watches, which were being sold to street vendors for up to $25 each.
Private investigators who work with police say Chinese gangs are involved at every level of counterfeiting.
“The guys tend to be the same folks who are involved in narcotics and human trafficking,” said Joseph Gioconda, whose law firm represents a dozen luxury brands.
But nabbing Chinatown’s low-level dealers has always been a game of Whack-A-Mole, since they’re usually charged with a misdemeanor and released.
Someone caught selling or distributing fake goods can be charged with trademark counterfeiting, a misdemeanor in New York — which carries up to a $1,000 fine and a year in jail.
If a seller is caught with $1,000 worth of goods, it’s a felony charge punishable by up to four years in jail. Hawking more than $100,000 of fake purses could land someone five to 15 years.
“To take counterfeiting seriously, you have to treat it the same way you would stolen property,” Gioconda said. “If you’re caught purchasing it, you’re punished. It’s the only way to put a real dent in the problem.”
Most counterfeit purses are made for pennies in Chinese cities such as Guangzhou—either in underground sweatshops or during secret shifts in real designer factories. Each bag costs no more than $2 to make.
Gang-linked Chinese distributors pay $10 to $30 apiece to buy the bags and ship from ports in Hong Kong or Shanghai to the US in containers. Investigators say it’s becoming more common to air mail them in smaller amounts.
To evade US Customs, counterfeiting rings hide the bags inside cartons of lingerie and other legitimate goods. They also falsely mark the goods on paperwork as “totes” or “stuffed animals.” Traffickers ship blank handbags and their luxury labels separately, so Customs investigators don’t realize the purses are fakes. For knockoff Louis Vuittons, the smugglers cover the signature fabric with a peel-off coating.
Once they slip through Customs, they’re home free. The Port Authority only checks commercial container trucks at bridges and tunnels to screen for explosives or hazardous materials—not for trademark violations.
The cartons of phony fashion are transported by truck to mini-storage facilities in lower Manhattan. From there, they end up in the bowels of a Chinatown shop, where touts lure in tourists and frugal fashionistas.
When two Post reporters hit Canal Street for a faux fix last week, a scout whispering “handbags, handbags” led them down Baxter Street to another man, who showed them a pamphlet with photos of dozens of bags, each numbered and arranged by brand.
He quoted a price of $120 for a red Tory Burch (the real McCoy retails for $500) and $120 for a black Chanel satchel ($3,000). The “buyers” haggled the price down to $80 each. He agreed and walked away toward Hester Street.
Fifteen minutes later, he reappeared with two black plastic bags and handed them to the reporters. After more haggling, he agreed to sell the bags for a total of $100.
The initial scout returned, trying to drum up more business: “This is Chinatown. Have some fun!”
Upon inspection, the bags display sloppy stitching and plastic labels. But the biggest giveaway that they are bogus is the strange smell. A toxic odor still lingers.