Purchasing Luxury Goods, Then Producing Imitations and Returning Them
Attaching Own Labels to Imitations to Evade Crackdown
A well-known influencer in their 30s who earned billions of won by selling so-called 'fake' products imitating domestic and international luxury brands was sentenced to prison again in the appellate court.
The Criminal Appeals Division 2 of Daejeon District Court (Chief Judge Choi Hyung-cheol) on the 1st sentenced Mr. A (35), who was detained and prosecuted on charges of violating the Design Protection Act and the Unfair Competition Prevention Act, to 1 year and 2 months in prison, the same as the original sentence.
In December 2021, Mr. A established a corporation for the sale and distribution of counterfeit luxury brand products, then hired employees to manufacture imitations through domestic companies and overseas local firms in fields such as clothing, shoes, and jewelry. He purchased new luxury products, produced imitations based on them, and then returned the originals. Additionally, to avoid crackdowns, he attached his own labels to the counterfeit products.
Mr. A was detained and prosecuted on charges of manufacturing and distributing about 20,000 counterfeit items (with an authentic product value of 34.4 billion won) of famous brands from 58 domestic and international companies such as Chanel, Time, and Ink over approximately three years from November 2020, earning 2.43 billion won in criminal proceeds. This is the first case where a suspect was detained on charges of violating the Design Protection Act and the Unfair Competition Prevention Act.
Mr. A had built recognition as a famous fashion influencer. Investigations revealed that he used his influence to promote products and attract buyers, then sold counterfeit luxury and famous brand products through a membership system.
Furthermore, Mr. A posted on social networking services (SNS) about his luxurious lifestyle, living in a high-end villa in Gangnam-gu, Seoul, and owning several expensive supercars. His activities were uncovered when the Korean Intellectual Property Office began an investigation in December 2022 following a complaint from the victim companies.
The first trial court stated, "He infringed on intellectual property rights such as trademark rights and disrupted commercial order," sentencing him to prison and imposing a fine of 20 million won on the corporation he operated. The court also ordered the confiscation of all criminal proceeds amounting to 2.43 billion won. However, the prosecution appealed, arguing the sentence was too light, while the defendant appealed, claiming the sentence was too harsh.
The appellate court dismissed both appeals, maintaining the original judgment, stating, "Considering that the crime was planned and organized, the criminal proceeds were substantial, no restitution has been made, and the defendant has children to raise."
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