Counterfeiters behind multi-million designer clothes scams face five years in jail under sentencing rules

Counterfeiters who rip off fashion brands with multi-million scams face five years in jail under new sentencing guidelines.

The new guidance, from the sentencing council, says that the kingpins in a counterfeit operation that produces more than £2 million worth of fakes will be expected to be jailed for five years.

Their lieutenants will face three years and the rest of the gang could be expected to serve two years, according to the guidance published on Tuesday.

The sentencing council said most cases related to fake clothing, shoes or accessories such as handbags but the guidelines will also help judges and magistrates sentence those who counterfeit computer games, toys, cosmetics, cigarettes, car parts and electrical equipment.

It said the scams ranged from the “very unsophisticated” such as selling a few obviously fake items on a market stall or online, to highly organised and profitable businesses manufacturing or importing a large quantity of high-quality counterfeit “designer” goods.

The rise of online platforms for buying and selling goods has fuelled a rapid increase in fake merchandise sold around the world, the value of which has reached $590bn (£384.4bn) a year, according to the OECD.

Its joint investigation with the EU’s intellectual property office  found illicit goods, from designer handbags to luxury watches, accounted for as much as 3.3 per cent of total annual international trade, up from 2.5 per cent ($461bn) in 2013.

Customs officials noted the most frequently seized imported fakes were items of footwear, followed by clothing, leather goods and IT equipment, with postal parcels the most popular way to ship counterfeit and pirated products.

District Judge Mike Fanning, a member of the sentencing council, said: “People or organisations that trade in counterfeit goods undermine the profitability and reputation of legitimate businesses. There is also a risk to purchasers from shoddy or sometimes dangerous goods.

“The new guidelines will assist courts in sentencing these offences, which can be complicated and may not be familiar to many sentencers.”

The council set out a matrix to be used for sentencing by magistrates and judges based on the value of the goods, the harm caused and the criminals’ culpability, which is linked to their role in the illegal counterfeiting.

The aim is to provide greater consistency of sentencing and ensure the criminals are punished to the full and in line with the law.

For the bosses of a £2 million-plus “high harm” counterfeiting operation, the “starting point” would be five years in jail, which could rise to a maximum of six years or could be lowered if there were significant mitigating circumstances.

In assessing harm, courts are advised to take account of not only the financial value of the goods and reputational damage to a legitimate business whose products have been faked but also the potential risks to safety or physical injury.

By contrast, at the bottom of the scale, a market street trader who may have ripped off goods worth £2,500, the starting point for a sentence would be a “high level” community order although courts could impose a maximum of 26 weeks’ custody.

Organisations rather than only individuals have also been brought under the sentencing guidelines for the first time, which means an owner as well as their company would be prosecuted using the index.

The boom in fakes comes as technology has made it easier to buy and sell goods online, with the OECD report highlighting “digital platforms which help connect supply and demand globally” as having a particular impact.

It also said there had been a “dramatic increase in the number of parcels crossing borders” as the sale of fake goods moved from bulk road, air and sea deliveries to smaller packages.

The report pinpointed China as by far the biggest country of origin for fake goods, and at the centre of a complex web of other countries used for shipping illicit goods. India, Malaysia, Pakistan, Thailand, Turkey and Vietnam were also identified as major sources of illicit goods, although considerably behind China.