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Reflections

Behind the Magic Door

by Ralph R. Reiland,
Professor of Free Enterprise

After the Macy's Thanksgiving Day Parade in New York, we hopped an open-topped tour bus with the grandkids for a trip down the rabbit hole into Chinatown.

"If they open a trapdoor, just walk through it," instructed our hip young tour guide, referring to the fake walls and secret rooms where Chinatown's counterfeiters conceal their goods, many of which are knockoffs of Coach purses sold by the boatload on Canal Street. "What you don't want to do is act like a tourist. Don't have a camera hanging around your neck."

Hiding the fact that we were tourists wasn't that easy. Before our feet hit the ground from the tour bus, we were surrounded by street vendors saying, "Coach, Coach," furtively showing us pictures of Coach purses and waving us to follow them.

"Don't pay more than twenty dollars" our tour guide had told us, for purses whose look-alikes sell in stores for around $400. "But for the real thing, the stuff that falls off the trucks, not fakes, go to 28th and Broadway. Look for the guys with the shiny blue bags. They'll take you upstairs to the third and fourth floors."

With the Thanksgiving buffet at The Waldorf-Astoria ($120 each for four of us, plus $170 for two grandkids, plus drinks, tip and tax) still five hours away, we stopped for a quick lunch at a bustling Chinese restaurant on Canal Street -- $4 for pork and broccoli over rice, $2 for wonton soup with 10 dumplings. A string of roasted whole ducks and turkeys, heads and feet attached, was hanging above the cash register. During soup, two guys carried a whole roasted pig up from the cellar and maneuvered it through the lunchtime crowd to the cutting boards.

In "The Knockoff Squad," a June 2002 article in The New York Times, Adam Fifield provided a glimpse into the "labyrinth of basements, subbasements, living quarters and factories, all beneath the streets of Chinatown."

Fifield described the covert exploration of a basement room in the mid-90s by detective Robert Holmes, president of an agency hired by companies to investigate trademark infringements: "Mr. Holmes found a tall cabinet against a wall. He opened the cabinet and pushed the back, which sprang open into another room. There was a man chopping chickens with a meat cleaver."

Another time, Holmes lifted a fake panel and stepped into an underground casino. "There were little tables, people gambling, drinking and smoking," explained Holmes. "Everything went quiet. A few guys reached under their jackets. And I just put my hands up and said, 'I'm just looking for counterfeit goods,' and stepped back through the panel."

After lunch, street vendors were hustling Movado knockoffs and pirated CDs on sidewalks crammed with tourists. Motioning for us to come inside her open storefront, a Chinese woman led us to the back of her tiny store and slid open a fake wall where --voila! -- a hallway led to a locked door of a hidden backroom. The size of a large walk-in closet, the room's walls were lined with Coach purses, $30 and $35 apiece -- less $5 with a little bargaining.

I learned two things that day. First, I'd never have guessed that women are in such a frenzy over Coach bags, enough to follow perfectly strange men through trapdoors and into hidden basement rooms for a good knockoff. But then there's this, from The Purse Forum blog, regarding a particular Coach design (no kidding): "Where can I get a cheap one of these, even a fake will do? Help a cross-dresser out!"

Second, what at first might seem like fun is not so funny beneath the surface. As Fifield described: "On a hot August day two or three years ago, Mr. Holmes glimpsed some boxes in the back of a Canal Street store. Moving them, he found a three-foot-high door. Opening it, he discovered an elderly man sitting on a stool in a cramped, sweltering room, labeling counterfeit purses. The man, who was probably working off a debt to a smuggler, had been locked in the room since 8 a.m. They found him seven hours later. 'He was sitting in his underwear and t-shirt,' Mr. Holmes said. 'It was 110 degrees in that room. I was amazed he was alive. He had two bottles of water and a big jug to go to the bathroom in. He was terrified when we went in there.'"

So why can't the city's police officers find the knockoffs if I had no trouble finding them in two minutes? The answer, alas, is that it seems like the cops are as crazy for the purses as the tourists.

Here's how New York Times writer William Rashbaum described a police officers' stash in a 2005 report: "A counterfeit pink Coach handbag. A knockoff New York Jets jersey. A fake Yankees jersey with Reggie Jackson's number, 44, and his name on the back."

This "exceptional collection of sham designer goods," explained Rashbaum, "was the price five police officers put on their badges, according to corruption charges leveled against the officers, most of whom have been on the force for at least 10 years."

To get the pink Coach handbag, etc., reported Rashbaum, the police officers gave the peddlers confidential information about pending raids and search warrants. Additionally, two of the cops, working with the peddlers, chased away competitors.

"As part of the investigation, Internal Affairs detectives watched the peddler hand over jerseys and other items to the officers," reported the Times.

"What these officers did," said Manhattan district attorney Robert Morgenthal in a March 2005 news conference, "is that they sold their badges for merchandise, for counterfeit Coach bags, for jerseys."

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Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh.

Ralph R. Reiland
E-mail: rrreiland@aol.com
Phone: 412-884-4541

"Ralph R. Reiland is the B. Kenneth Simon Professor of Free Enterprise at Robert Morris University, the owner Amel's Restaurant, and a columnist with the Pittsburgh Tribune-Review."