Famed French fashion brand Louis Vuitton faces a money laundering probe in the Netherlands over cash purchases made by a Chinese national who spent around $3.5 million on handbags and other luxury goods, according to a report.
A Chinese national bought around $3.5 million worth of Louis Vuitton handbags and other luxury goods at several outlets in the Netherlands over an 18-month period — prompting Dutch authorities to launch a probe into the French fashion house for failing to curb an alleged money-laundering scheme.
The female suspect, identified as Bei W., allegedly scooped up the designer items at Louis Vuitton stores in the Netherlands over an 18-month period between 2021 and 2023, the Dutch News reported.
Prosecutors further allege that the Dutch resident from city of Lelystad, located about 50 miles northeast of Amserdam, paid in cash with money attained from a convicted underground banker, raising the possibility of ties to transnational organized crime.
They also suspect that at least one employee at a Louis Vuitton store in the Netherlands assisted or advised the suspect on how to structure payments to remain under the legal reporting limit.
According to investigators, Louis Vuitton failed to take basic steps such as verifying the identity of the customer or flagging the suspicious pattern of repeated high-value cash transactions.
Authorities argue that the company’s lack of scrutiny may have enabled the laundering of criminal proceeds.
The all-cash purchases were deliberately structured so that no individual transaction exceeded 10,000 euros — the threshold that would trigger mandatory reporting under Dutch financial crime laws, according to reports.
Dutch authorities say the transactions were designed to evade local anti-money laundering laws, which require retailers to report high-value or suspicious transactions.
In this case, investigators allege that Bei W. used a technique known as structuring — also referred to as “smurfing” — to avoid detection.
The purchased items were reportedly shipped to China and Hong Kong to avoid Beijing’s high import taxes, a practice known as “daigou.”
The underground “daigou” trade was estimated to be worth over $86.7 billion in 2023. Authorities say this system provides a mechanism for laundering the proceeds of crimes under the cover of legitimate cross-border commerce.
The Dutch Public Prosecution Service (OM) has officially named Louis Vuitton Netherlands as a suspect in the investigation. However, it remains unclear whether formal criminal charges will be filed.
The Post has sought comment from Louis Vuitton.
Louis Vuitton’s Parent Company LVMH Reports nearly $100 billion in revenue for 2024
LVMH, the world’s largest luxury goods conglomerate, was established in 1987 through the merger of Louis Vuitton and Moët Hennessy. It is publicly traded on the Euronext Paris exchange.
Bernard Arnault, one of the world’s richest people, serves as LVMH’s chairman and CEO. Arnault is also the company’s largest shareholder, with the Arnault family maintaining significant control over the business.
As of Friday, Arnault boasted a net worth of $157 billion, according to the Bloomberg Billionaires Index.
LVMH owns a portfolio of iconic brands across fashion, jewelry, cosmetics, and spirits, including Louis Vuitton, Dior, Fendi, Givenchy, Sephora, Tiffany & Co., Moët & Chandon and Hennessy.
Credit: Source link
