Tax scam: Vietnam police shut Italian fashion shops for claiming to import Chinese knockoffs

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One of two fashion stores that have been shut down by police in Ho Chi Minh City after they imported Italian luxury goods but claimed they were cheap Chinese knockoffs to avoid tax  

The Ho Chi Minh City police have shut down two fashion stores that imported a large consignment of Italian luxury goods but passed them off as cheap Chinese products to evade tax.

The police said they moved against Gucci and Milano, both at 88 Dong Khoi Street, District 1, after failing to reach their owners on Wednesday and Thursday despite repeated phone calls and summons.

An officer at the police's economic crimes investigation division (PC46) told Thanh Nien that items displayed at the two stores were priced at tens of millions dong, but their invoices of sold items did not state that they were Italian.

The stores' sales this year have been worth more than VND12 billion (US$571,500), Thanh Nien has found.

On November 27 the police caught four trucks bringing cartons containing clothes, handbags, and footwear made by famous brands like Gucci and Dolce&Gabbana to the stores' warehouse in the basement of the Sheraton Saigon Hotel.

They had been imported by Nam De Company from Hong Kong, and declared to be of Chinese origin and worth US$1.8-7 each.

The police have been unable to contact the importer either, and the company's office has remained closed since the bust.

Thanh Nien found that while the showrooms' address is registered for business under the name of Vo Thi Ngoc Phuong, their real owners are two Vietnamese-Americans.

Thanh Nien was contacted by two different people claiming to be the representatives of the goods' owners, Milano Vietnam and Milano Gucci Fashion Trade and Services Ltd., Co.

But Thanh Nien could not find either of the companies in the list of businesses registered with the city Department of Planning and Investment.

Nguyen Huu Thi, who claimed to be the general director of Milano Gucci Fashion Trade and Services Ltd., Co., said his company bought genuine goods from Italy and contracted Nam De to import them into Vietnam.

But since they should have been shipped directly from Italy, and Nam De transited them in Hong Kong, Milano-Gucci had refused to take delivery though the consignment had arrived three weeks ago, he claimed.

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"But somehow the batch was still brought to the warehouse and busted by the police," he also claimed.

The same day Thanh Nien also received an email from a woman named Huyen Nguyen, who claimed to be a marketing executive at Milano Viet Nam, saying the consignment was genuine.

The police are investigating.

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