The history of a $22 million exploit fueled by greed and fraud:
How seven Hermès employees ran a crime ring selling "super fake" iconic bags that turned into a $22 million dollar business.
The high-quality fakes featured the original orange packaging, raw materials, and tools that were stolen from Hermès' factories. The Hermès workers would make the bags with real crocodile skin from an Italian supplier. They also used zippers and other components smuggled out of Hermès workshops.
In the years between 2011 and 2014, the suspects, who were experienced Hermès leatherworkers, artisan cutters, and assemblers, made and sold around 148 super fakes, including Birkins – the most profitable and popular bag. French officials believe that the criminals' operation was valued at approximately $22 million USD.
One employee supplied jewels to decorate the bags, four others were skilled in assembling the bags, including the brand's hand-stitched signature saddle, while the others handled logistics and high-level business activities.
The suspects allegedly crafted these counterfeited bags in the privacy of their own homes, profiting more than €4 million ($4.3 million USD) by selling them to consumers in the resale market for prices between €23,500 to €32,000 each ($25,300 - $34,500 USD).
After getting caught by Hermès and a team of French officials, the former Hermès employees were convicted and finally received their sentencing in 2020. All seven employees were criminally charged and sentenced to prison for a period of six months to three years. Hermès requested €2 million ($2.15 million USD) in damages for the exploit but was only awarded €580,000 ($625,000 USD).
This isn’t the first time we’ve heard of fraud within the luxury handbag industry. If you might recall, recently a Louis Vuitton customer in China sued and won against the brand for selling them a fake Vaugirard handbag. For more information on this story, click here.
