If you own a luxe fashion store and have a regular customer who drops a lot of cash in your store, that is a good thing, right? Apparently not for Louis Vuitton Netherlands.
To the proprietors, what looked like a happy repeat customer was actually a “daigou,” an individual who lives outside of China and offers their purchasing services to those wishing to purchase goods abroad. Acting as an international personal shopper is not illegal. But, in this case, the shopper known as Bei W., was laundering money for a client.
Louis Vuitton Netherlands, a subsidiary, is now under investigation by Dutch prosecutors for its involvement in the matter. Like many banks accused of failing to flag suspicious deposits, Louis Vuitton is accused of not raising a red flag given the shopping patterns of the woman, who has now been arrested.
Should Louis Vuitton have known?
Law enforcement alleges that Louis Vuitton should have known something was amiss. Here are some fine points of the crime:
- The shopper spent money at several Louis Vuitton stores throughout the Netherlands.
- During her shopping trips, she used different names and contact information.
- The woman made purchases that always totaled just under €10,000. As many know, €10,000 (and $10,000 in the U.S.) is the threshold for reporting transactions that could involve money laundering, tax evasion or other types of criminal fraud.
Investigators say the purchases were sent to China and Hong Kong. The individual who hired the shopper has been convicted in the scheme. The shopper worked with at least two other accomplices, one of whom worked in a Louis Vuitton store. The employee kept the shopper informed when items arrived in the store that suited her price range. Both accomplices were arrested. A New York Times article points out the larger picture regarding this kind of money laundering and luxury goods.
Throughout the stages of money laundering, illicit proceeds are mixed with clean money repeatedly to cleanse the dark money of its origin. Money is laundered through shipping, by buying high-value assets like boats, cars, art or property, and by purchasing luxury goods that can later be resold. Something, say, you might find in a Louis Vuitton store.
Overall, Bei W. laundered about $3.5 million between September 2021 and January 2023. While this scheme was shut down, and the personal shopper will probably not shop again anytime soon, the ceaseless global industry of money laundering rolls on.
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When you are involved in a tax controversy or facing allegations of money laundering by the Internal Revenue Service (IRS), our legal team offers strategic guidance and strong criminal defense. Contact us to set up a consultation or call 440-250-9709. We serve clients across the U.S. and internationally from our offices in Cleveland and Chicago.
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