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By Brigid Gaffikin, Bay City News

January 25, 2006

SAN FRANCISCO (BCN) - In a second round of investigations into the same businesses that were under scrutiny less than a month ago, federal agents today raided five antique and furniture retailers in Union Square and Fisherman's Wharf seeking evidence of illegally imported and counterfeit designer goods, according to federal authorities.

One person was arrested for being in the United States illegally, according to U.S. Immigration and Customs Enforcement investigator Charles DeMore.

Federal agents searched Lloyd's Fine Art and Jewelry at 229 Jefferson St.; King's Fine Art and Antiques at 51 Jefferson St.; King's Fine Art and Antiques Showroom on Powell Street; Gioia Fine Art at 238 Stockton St.; Buckingham Palace Fine Art at 441 Sutter St.; and a warehouse at bays 45, 49 and 53 of Pier 27, according to an affidavit from the search.

DeMore said he suspects the businesses are linked. They have been in operation for "upwards of 15 years," he said.

He said it is not yet clear how many of the purported designer brand goods at the stores are genuine.

Although investigators have not yet established the retail value of the counterfeit items in each store, which include furniture and smaller items like chess sets, porcelain eggs and pillboxes, evidence suggests some of the goods seized were being sold at heavily inflated prices.

An ICE spokeswoman said investigators are still combing through each of the stores. "We probably will be into these businesses until well into the evening," Virginia Kice said.

Today's raids were sparked by related investigations less than three weeks ago.

On Jan. 5, federal agents searched the same stores raided today, as well as six others, because of suspected financial, immigration and endangered species violations.

Those raids resulted in 28 arrests for immigration violations, DeMore said.

Evidence uncovered during the earlier investigations led agents to suspect that the stores may be selling illegal, counterfeit furniture.

Federal agents forwarded photographs they had taken of merchandise being sold as Versace to a Versace attorney in New York, DeMore said.

Paperwork found by agents in the Jan. 5 raid suggested that some of the stores were placing orders for counterfeit goods with manufacturers in China.

An invoice addressed to King's Fine Arts and Antiques from Henan Zhenping Arts and Crafts Group Corp. in China included a headline "Moshe's Order of Versace furniture" and detailed some 171 pieces of furniture at a total cost of $36,270.20.

Versace "agreed to send a representative to personally examine Versace merchandise" at the locations under suspicion, according to the affidavit.

The Versace representative, Ai Torii, visited several stores and was offered a range of supposedly designer-brand goods at steep markdowns off what store representatives said were their standard retail prices.

What Torii discovered "validated our suspicions," DeMore said.

Torii was offered a $12,500 sofa for $6,000. She was offered an eight-place dinner setting at an even greater discount, $2,200 instead of $10,500, according to the affidavit.

At some locations, Torii said, sales representatives hedged when she asked whether goods they were selling were Versace.

One man said "he did not know who actually designed the items and that he buys them from vendors" and that the goods would not come with a certificate of authenticity, according to the affidavit.

Others said some goods were Versace replicas.

But another man stated outright that a sofa Torii recognized as a copy of a Versace pattern was a genuine Versace piece.

DeMore said that some of the counterfeit Versace goods were sufficiently well-constructed to be convincing even to a discerning customer.

"Some of the products they were selling were fifty, sixty thousand dollars for a single item," DeMore said. People spending that much are "usually pretty savvy" about what they are buying, he pointed out.

Typical customers of the stores now under investigation included "wealthy tourists," DeMore said.

Counterfeit goods threaten consumers and rob legitimate businesses and retailers of millions of dollars, Kice said.

Counterfeit goods "don't represent the same quality" and even if someone pays thousands of dollars for an apparently fine quality item, as a counterfeit it is still worth nothing, she added.

Agents from four federal agencies -- U.S. Immigration and Customs Enforcement, the Internal Revenue Service-Criminal Investigation, the U.S.

Fish and Wildlife Service and the Federal Bureau of Investigation -- were involved in the operation today.

Copyright © 2006 by Bay City News, Inc. -- Republication, Rebroadcast or any other Reuse without the express written consent of Bay City News, Inc. is prohibited.




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