The City Attorney’s Office and a Fashion District businesswoman — who allegedly admitted to undercover officers that she’s been selling counterfeit handbags for up to $1,000 each for years and boasted about how she avoided getting caught — reached a settlement of the city’s lawsuit in which she agreed to pay $50,000 in civil penalties and abide by other conditions.
The City Attorney’s Office sued Condotti European Inc., located on 9th Street, and its president, Fatemah Vahdat “Nancy” Mahdavi. According to a judgment signed July 6 by Los Angeles Superior Court Judge Gregory Keosian, Mahdavi also must pay the city $12,500 in investigative costs and she cannot be present at any location where counterfeit goods are sold, stored, manufactured or transported.
Mahdavi also agreed to allow police to search any business where she works without a warrant and for the installation of at least three video cameras with sweeping views of her business, including the backroom, but excluding bathrooms. She must provide proof within 30 days of the judgment that she has shut down the website condotticollection.com. She and her corporation are banned from engaging in further Internet sales.
Mahdavi’s business is located on the 10th floor of the California Market Center, not far from Santee Alley, characterized in the May 4 complaint as “one of the epicenters of counterfeit goods in the United States.” The judgment allows her to continue running the company, but she cannot relocate to or operate another business in the state in which counterfeit handbags, clothing-related item sunglasses, electronics or other phony items are made, sold or stored.
In March, law enforcement officers who had a search warrant found 68 counterfeit replicas of luxury bags with a retail value of $277,880 at Mahdavi’s business, the suit alleged.
“Mahdavi was arrested and told officers she knew it was illegal to sell counterfeit goods and that she purchases counterfeit bags on Canal Street when traveling to New York City,” the suit alleged. “Mahdavi told the officers that she purchases the counterfeit items for between $80 to $400 and sells them for between $140 and $1,000 each.”
Mahdavi said the alleged phony goods were only a small part of her business, where she pays monthly rent of $2,100, according to the suit.
New York City’s Canal Street is located in that metropolis’ Chinatown, and proprietors there also are alleged to be active in the counterfeiting trade.
Commerce in counterfeit goods deprive legitimate retailers of an incentive to create new and innovative products and make it more expensive for them to “compete and thrive in the city of Los Angeles,” according to the lawsuit.
Unlike legitimate owners, counterfeit goods sellers typically do not pay business taxes or have proper insurance or licenses, according to the City Attorney’s Office.
The suit cites a Los Angeles Economic Development Corp. study that found that an “estimated $2 billion was spent in the Los Angeles black market for pirated goods in 2005, representing a substantial loss to the legitimate retail sector and the city’s tax base.”
During another undercover operation in January, Mahdavi said she had just returned from Europe and Turkey and asked if the “customers” were looking for handbags, according to the lawsuit. She went to a back room and returned with several counterfeit bags and wallets resembling those made by Chanel, the suit alleged.
“Mahdavi held one of the handbags and advised it was the best fake handbag you could find,” according to the lawsuit, which alleged she said she had been in business for more than 30 years and was “very careful who she sells to in order to avoid getting caught.”
—City News Service