We are loving "Deluxe," the book about how the luxury market went mass market by Dana Thomas, Newsweek's culture and fashion writer in Paris. Today's excerpt concerns the counterfeit market, from the suburban housewives who sell the goods to their friends at purse parties to the gangs of New York who actually move the merchandise. Obligatory pimping: "Deluxe," published by The Penguin Press, arrives August 16th.

Purse-party ladies are the drug dealers of the counterfeit trade: they buy from the wholesalers and sell to suburban users, folks with a craving for the goods but not enough dough for the real thing. Like teenagers gathering at a friend's upper-middle-class home to buy a couple of joints with their allowance or babysitting money, suburban women converge in well appointed rooms for wine, hors d'oeuvres, gossip, and fake Vuitton or Gucci handbags. The women hosting these fetes will make a killing—they double their investment—and never declare it to the IRS. Take Virginia Topper, the wife of a lawyer in Long Island, New York. When she was busted in 2003, she had $60,000 in cash stashed in her underwear drawer and a Jaguar in the driveway. She was found guilty and sentenced to community service. "She was the ultimate Amway lady," [New York security expert Andrew] Oberfeldt laughed.

Most purse party ladies don't see buying or selling fake handbags as a real crime.... In a survey by the Anti-Counterfeiting Group, one-third of those questioned said they would knowingly buy counterfeit goods if the price and quality were right, and 29 percent said they saw no harm in the selling of fake goods unless the purchaser was at risk. "We'll go on raids in Chinatown wholesalers and we'll find five or six suburban women standing there—customers," Oberfeldt tells me. "We'll say to these women, 'The dealers take you down dark corridors, through locked doors. The police say, "Open up!" The lights are turned out, and everyone is told to be quiet. At what point did you realize something was amiss here?'"


Like the drug business, counterfeiting has become a professional racket run by organized crime. In New York in the 1980s until the mid-1990s, gangs—like a group of Asian American kids called the Born to Kill Gang—were in charge. "If we showed up to do a raid, women would take counterfeit watches, shove them up their shirts, and say, 'I'm pregnant, don't touch me!'" remembers Oberfeldt. "Once I saw a three-month-old baby in a milk crate that sat on top of a case of M-80 explosives. The gangs came after us with bats, they'd slash our tires, throw knives and significant explosives. It was terrorism. They tried to intimidate us. We videotaped them and locked them up and we got a lot of street cred when we manned up from ten to forty men and kept going."

Today Canal Street is run by grown-up gangs from China, like the Fukienese gang, as they are known in New York, whose members come from Fujian... They speak a Fujian dialect among themselves and run the north side of Canal Street, west of Broadway. And they freely let the police seize goods rather than get arrested for fighting back. The network is tight.... [T]hey all have direct-connect Nextel radio: if a police car turns the corner, the message is relayed down six blocks instantly and everything is shut down. They use homeless people as lookouts, giving them walkie-talkies. Random killings don't happen. "It's bad for business," notes Oberfeldt.