River Oaks Rip-offs

From their independently operated stalls inside the warehouse-sized Market Place Antiques in West Houston, dealers display wares reflecting down-home tradition and relics of history.

Old dining room sets vie for attention with out-of-print books and even collectible John F. Kennedy campaign buttons. From her nearby booth, Rose Knippenberg doesn't fear that competition, whose wares are geared toward customers' memories of the past. She caters to clients very much interested in the material here and now.

However, Knippenberg admits in her lilting British accent that her brand of merchandising makes her nervous. The small, middle-aged woman has a sweet face and long, dark hair. She smiles warmly, even as she mentions, "I don't want to go to jail."

With that introduction, Knippenberg reaches under her table adorned with antique printing blocks for sale. She pulls out a large light blue Tupperware container packed with purses and scarves. They sport the labels and emblems of Chanel and other exclusive accessory designers.

Her voice grows excited as she describes the plushness of a Chanel evening bag and its lambskin lining, the softness of the scarves' silk and the authenticity of her products. And especially the prices.

A Chanel scarf, complete with monogram, retails for about $100 at Neiman-Marcus in the Galleria, the only authorized outlet in the area. Knippenberg offers it for $25. Chanel purses, which start at about $1,300 at Neiman's, are available here for $100 plus tax.

On this day, the shopper, a Houston Press reporter, settles on the evening bag. Knippenberg sends her away with a genuine peck of a kiss on the cheek -- and a "Chanel" purse that is patently counterfeit.

In trying to knock out the knockoff market for designer goods, trademark enforcers express amazement at the latest trend in selling these bogus wares.

Investigators readily admit that it is still not uncommon to see such commodities offered at flea markets and small resale stores across Houston. But in recent years, toughened laws, greater public awareness and police raids have largely stopped retailers who had openly sold counterfeit merchandise.

However, Knippenberg and a number of other independent sellers are not of that same genre of merchants. Recent investigations by law enforcement authorities and private investigators have exposed a relatively widespread and lucrative underground network for counterfeit products -- one dominated by upper-crust sellers who are usually women.

Areas of authentic wealth, even Memorial and River Oaks, are the bases of operation for vending these bogus goods. Some residents of these tony enclaves operate solely out of the trunks of their luxury autos, at "house parties" with exclusive invitation lists or by special appointment.

Using their impressive homes as cover, they are exploiting a market of materialistic wannabes hoping to copy well-to-do lifestyles at budget prices.

"I can understand if the people selling these products were flea-market operators," says private investigator and retired FBI agent Richard Miller. "That doesn't make it right, but I understand when someone is trying to make a buck. But rich River Oaks women? There is no excuse. Here are River Oaks people who have money."

Prestigious companies that became the favorite targets for counterfeiters have banded together with law enforcement and civil courts to battle an industry that is estimated to net millions of dollars annually in the Houston area. They have filed lawsuits and charges and have used private investigators in cities across the nation to combat the counterfeit trade.

Miller says that, despite two recent criminal cases targeting merchants of bogus items in Houston, the underground network continues to flourish. That particularly holds true in Texas, the land of the budding socialites, some who blend big hair with big airs.

"Houston and Dallas have become a hotbed for this sort of thing," Miller says.

After being contacted by the likes of Chanel, Miller says he began to see a pattern in the industry of counterfeit merchandise. Posing as a couple looking for cheap brand-name items, Miller and partner Georgia McKernon uncovered "a network of rich women from River Oaks" who set up "Tupperwarelike" parties for those wishing to buy counterfeit jewelry, watches, purses and clothing. They found that a variety of merchants, most from the upper economic status, had products shipped from counterfeit factories in New York.

Investigators made a primary breakthrough last June when they busted Barbara Markman, 52, for violations of the relatively new criminal law protecting trade names. A Chanel spokesman says Markman was dealing "big-time" in counterfeit Chanel products by selling through merchandising parties, some of them hosted in River Oaks.

Police raided Markman's home, valued on the tax rolls at $550,000, and seized counterfeit goods. In a plea bargain, Markman gained probation in exchange for cooperating with investigators by turning over three other dealers in counterfeit goods.

Markman declined to discuss her case with the Press and even denied knowing anything about selling knockoff goods.

"It is hard to track [people such as Markman] down since it is so far underground," says Robin Gruber, a New York attorney for Chanel. "She was doing it big-time. She was a big-time lady."

The law enforcement probe widened after that case. Miller and McKernon soon crashed a River Oaks-area party where the goods were being sold. They seized more than $20,000 in counterfeit merchandise and arrested Robert "Christopher" Phillips, whose trial is pending.

Miller says that, as he infiltrated the system, he was surprised at its extent. "I could get whatever I wanted with a phone call," says Miller. "Fake scarves, purses, watches, you name it."

The telephone was all the Press needed to link up with Knippenberg. After unsuccessful attempts to arrange a buy with a few other alleged counterfeit dealers with Memorial or River Oaks telephone exchanges, the Press reached Knippenberg at her Memorial-area home, which is appraised at more than $200,000 on the county tax rolls. She agreed to meet the purchaser at her booth at the antique outlet at 10940 Old Katy Road.

Casually asked how she obtained the goods, the woman said only, "here and there," although she added that she could "get anything else you needed."

When the buyer's identity was revealed in a later call, Knippenberg acted as if someone else had sold the goods. "Sorry, I don't dabble into that," Knippenberg said. "I cannot help you."

Robin Gruber of Chanel said that, in general, an inspection of the craftsmanship will usually determine if the article is genuine. "If something doesn't look like high quality, the leather isn't high quality, the stitching isn't good, the hardware doesn't look good, it is probably not Chanel."

The black bag, with a poorly stitched trademark of Chanel on the front, lacked the Chanel authorization card inside that comes with all Chanel handbags. This bag contained only a sticker that says, "CHANEL, MADE IN FRANCE." Unlike authentic Chanels stickers, this one is easily removable and is only stitched at the top. A gold metal piece that holds uneven fringe on the left side has a crudely melted logo of Chanel on it, though it lacks the detailed quality of an original.

Gruber acknowledged that vendors of bogus merchandise are not necessarily robbing the exclusive companies of customers, because the high prices can make the authentic goods unaffordable to many.

John Cohn, an attorney who files civil suits for Chanel against counterfeiters, explains, "These products are being sold in a market where even the first-time buyer knows very well they are not getting the genuine product. I suppose the cachet of a famous brand catches on. But eventually the product will pass on as a genuine one."

Gruber says the image of the company suffers from knockoffs.
"[Counterfeiting] tarnishes the trademark. Chanel products are of a very high quality, and we don't want products out there that bear the Chanel trademark that are of low quality."

Meanwhile, investigators get regular reminders that their work has not yet driven all counterfeit dealers into remote flea-market booths or the living rooms of posh private homes.

Last December Miller and McKernon walked into the downtown Hyatt Regency for a fund-raising bazaar of the Cancer League. Vendors were doing a brisk business with wide-open sales of a "whole load of counterfeit items": fake watches, jewelry, Chanel and Prada merchandise, Miller says.

Police arrived but told Miller that immediate action was not warranted by what they believed was only a small amount of bogus goods being sold.

Doris Solei, president of the Cancer League, says she had nothing to do with the bazaar. If there was counterfeit merchandise being sold, it was done without the knowledge of the charity. "I am a little concerned about this because we have a stellar reputation in this city," Solei says. "We are all volunteers."

Besides, she says, the event was not profitable to the charity.
The designer industry wants to make sales similarly unprofitable for bogus vendors.

"We worked really really hard to get the problem under control," says Gruber. "We've [spent] a large amount of money to make sure that the bad guys will be punished and people know that if they are counterfeiting Chanel products, there are going to be some repercussions.

"We've made a dent," she adds, "but when they stop counterfeiting Chanel, they move to something else."

Jennifer Mathieu contributed to this article.

E-mail Russell Contreras at russell_ contreras@ houstonpress.com.


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