Police in Ho Chi Minh City have arrested a man for allegedly importing Italian luxury items as cheap Chinese knockoffs to avoid taxes, news website VietNamNet reported Wednesday.
Le Hong Duc, 35, was accused of illegally importing the luxury items for Milano and Gucci stores last year.
He was allegedly ordered to do so by his employer, Tran Anh Tuan, who owns the shops, the online newspaper quoted police as saying.
Tuan is now being questioned by police.
Previously, Nguyen Thanh Binh, director of Nam De Company, which was contracted to import the consignment, and his employees, were also summoned by police.
Meanwhile, three customs officers were suspended for allegedly colluding with the importer to pass the genuine consignment off as knockoffs.
On November 27, HCMC police caught four trucks transporting cartons containing clothes, handbags, and footwear made by Gucci and other luxury brands to a Gucci and Milano warehouse, which supplies the retail outlets in District 1.
They had been declared to be of Chinese origin and worth only $1.8-7 each for import, thus being subject to import taxes of VND27 million (US$1,284).
However, later a group of experts from Gucci came to inspect the items and concluded that they were genuine and had been made in Italy.
Following the raid, police closed down the two stores, but they were allowed to reopen two weeks later.
In related news, at a press briefing on Tuesday, the Hanoi Department of Industry and Trade announced that two Gucci and Milano stores in Hanoi are also being investigated for evading taxes.
On December 7 last year, city agencies raided the shops following the bust in HCMC and confiscated nearly 8,000 items which were undocumented.
The items have listed prices that brought their total value to nearly VND100 billion ($4.75 million), Dan Tri quoted Nguyen Thi Nhu Mai, vice director of the department, as saying that day.
The stores were fined a total of more than VND42 million, but are still under investigation, according to Mai.
She said initial findings showed that the case was "complicated" and the stores' tax evasion schemes were "sophisticated."
At the end of every business day, store owners would delete all their trade activities on computer servers, leaving no trace, she added.
According to Mai, Hanoi's market management agency is selling the undocumented items at over VND29 billion ($1.38 million), with the proceeds to be submitted to the state budget.
But, so far no companies have expressed interest in purchasing them, she said.
The stores in Hanoi were forced to shut down the day after the raid last year.
However, on January 11, they reopened without approval from related agencies, VnExpress reported, adding that some customers reportedly bought items worth over VND100 million ($4,700).
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