Chinese Organized Crime and Counterfeiting

Chinese Organized Crime and
Counterfeiting
Joe Kafchinski
April 27, 2009
ITRN 701-005
Summary
• Overview of Chinese Organized Crime
• Typical Counterfeit Transaction
• Consequences of Counterfeiting
Types of Chinese OC Groups
• Triads
– Sun Yee On, 14K,
Luen Group, Wo Group
• Gangs, tongs (ethnic or regional)
– Taiwanese:
United Bamboo
– Others:
Fuk Ching, Red Sun, Big Circle
Triads
• Not all triads are also OC groups - 15-20 out of 50+ triads in Hong
Kong are involved in criminal activity
• “Triad” is a term for a Chinese secret society founded in
the 1600s to operate against Qing dynasty rule
• Turned to crime in 20th century after
fall of dynastic rule in China
• Use hierarchy and ritual, but are very loosely structured. Higher
levels are their to resolve disputes, not direct operations.
• Can have significant turf battles between triads, but they
will also be very cooperative when advantageous
Areas of operations for 7 of the largest
Chinese Organized Crime Groups
Russia
Canada
Europe
USA
Japan
Southeast Asia/Philippines
Tri-border Area
Australia
Red Sun
Big Circle
14K
Luen Group
Sun Yee On
United Bamboo
Wo Group
Common crimes
• Protection rackets
• Human trafficking (“Snakeheads”)
• Heroin trade (“China White”)
• Smuggling & Counterfeiting
– Document fraud
– Credit card fraud
– Cigarettes
– Consumer goods
Counterfeiting
• FY 2008 Customs IPR Seizures
– 14,992 seizures;
$273 million domestic value
– $222 million (81%)
of all seizures were from China
– Top commodity: Footwear $102 million
• 96% of this from China
– Safety and Security Commodities:
1,950 seizures; $62.5 million
Public warehouse
Regional
Distribution
Center
Who cares?
• OECD estimates: $200 billion/year in counterfeit trade.
• Dangerous counterfeits
– Baby formula, circuit breakers, aircraft and
automobile parts, military equipment
– Cigarettes, vodka
• Counterfeit Pharmaceuticals
– <1% in industrialized countries but >30%
in parts of Africa, Asia, Latin America
– Medicine purchased online >50% counterfeit,
particularly “Canadian” imported drugs
Who’s responsibility is it?
• Law enforcement
– Wants seize-able assets
– It’s a trade issue
– Companies
– Some care (Disney, Microsoft)
– Others don’t (fashion)
– Unless there’s strict liability
• Consumers?
Sources
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