An Evening at the N. Branch of the Chinese Public Security Bureau

From the recorded interrogatory of a counterfeiter arrested by the Chinese Public Security (PSB)

By Paolo Beconcini

In the world of an IP professional, a police raid of a counterfeiter in China is always an exciting moment. The discovery of a fat target, the secret preparation and negotiations with the local police station, the pre-raid checks, and finally the launch of the raid and the counting of the seized goods, the detained counterfeiters. However, the excitement evaporates in a few days and right holders will quickly move on to the next case. They will hear about this raid again months later, when the indicted counterfeiters will be sent to trial before the criminal chamber of the local People's Court. However, most right holders will know what happens in between the raid and the trial. These events are however very important. Not only they may later reveal more evidence about the nature and scale of the counterfeiting operation, they will also provide evidence for possible damage claims later on. Nobody, sitting comfortably sitting in an office in Europe or in the U.S. will really think about the people involved in the raid and their stories.

Given that I am the one behind such cases, I am often in the position to see what happens in in between the raid and the trial and to see the people behind them. I hear the voices of the guilty and that of the public officials. I have always found interesting reading the transcripts of the police interrogations. In their dryness they betray however, the existence of a whole world we find hard to grasp. Often, those arrested are just cogs in a big wheel. They get involved in illicit traffics because they need to make ends meet. You may think of reaches and fat bank accounts but what we often find are almost bankrupted enterprises and desperate individuals. The real wealth hides behind them and it takes time and effort to hit the real big guys running the show.

From the interrogatory of the police, or from the People's Procuratorate opinions and indictments often emerge interesting details about how all these investigative and law enforcement activities take place. Therefore, I took one of these interrogations from one of my many cases to show an example of how it looks like in a typical case. Names and locations are fictitious or omitted for obvious confidentiality reasons. I also added a fictitious scene at the police station to enhance the narrative flavor.

(...)

Constable First Class Xia walked in the light flooded room with a brisk pace, a yellowish folder in his left hand. It had been a long day counting cartons after cartons of counterfeit goods in a smelly factory in a stifling heat. A colleague was typing away at her desk without paying any attention to him. The other desks were empty. The buzzing sound of two large rotating fans filled up the room. Constable Xia was sweating. With a sharp turn he was at his seat. He swung the faux leather chair around and let his slander body slump on it with a thud and the clanking sound of a loose metal screw. In front of him, handcuffed, stood a man in his forties. His was looking quietly at a fixed point on the desk, maybe on a little jade figure of a dragon, maybe at a disorderly stack of files. The skin was sun baked and the face wrinkled like that of a sixty years old man. He was wearing a burgundy color jacket over a blue t-shirt. "He must feel hot" thought Constable Xia, who immediately took off the blue jacket to show patches of sweat on his light blue shirt. Xia opened the yellow folder and started whispering the characters he was reading. The man in handcuffs kept staring at some point on the desk without moving. Finally Constable Xia raised the head from the file. he felt tired. An interrogatory at this late time in the evening was the thing he hated the most. He just wanted to go home. He sighed and said, "Mr. Yuan, shall we start?". Mr. Yuan finally raised his gaze and met that of Xia. Mr. Yuan looked resigned and tired.

Xia: We are police officers from the N. Branch of the F. Public Security Bureau (showing work ID). Because you are suspected of criminal behavior, we are now interrogating you according to the relevant provisions of the "Criminal Procedure Law." You have the right to make statements and defenses, but you must not make false statements, otherwise, you will bear the corresponding legal responsibility. Do you understand?

Yuan: I understand.

Xia: Mr. Yuan, because you are suspected of counterfeiting a registered trademark, the N. Branch of the F. Public Security Bureau has decided to detain you. Do you understand the reasons of your detention?

Yuan: Yes, I know, I understand.

Xia: Mr. Yuan , have you ever engaged in counterfeiting registered trademarks before?

Yuan: I have not.

Xia: Where do you work?

Yuan: I work at Y. Shoes Industry Co., Ltd. in L. Town, N. District, F. City.

Xia: What is your position at Y. Shoes Industry Co., Ltd.?

Yuan: (Silence, no answer)

Xia: Who is the legal representative of Y. Shoes Industry Co., Ltd.?

Yuan: Mr. Yuan C., my uncle.

Xia: Who is the actual investor in Y. Shoes Industry Co., Ltd.?

Yuan: I am the actual investor.

Xia: Who is the actual operator of Y. Shoes Industry Co., Ltd.?

Yuan: I have fully entrusted the management to my uncle Yuan C. He is publicly known as the boss of Y. Shoes Industry Co., Ltd.

Xia: What is the business of Y. Shoes Industry Co., Ltd.?

Yuan: The business of Y. Shoes Industry Co., Ltd. mainly involves manufacturing and finishing shoes. Some of the materials are supplied by the buyer other are bought by ourselves.

Xia: What items were seized by the public security authorities from Y. Shoes Industry Co., Ltd.?

Yuan: A batch of children's shoes and casual shoes under the "YYY".

Xia: What are the marks on the shoes seized by the public security authorities from Y. Shoes Industry Co., Ltd.?

Yuan: The insoles of the shoes seized by the public security authorities are marked with "ZZZ" and other letters.

Xia: Who produced the shoes seized by the public security authorities from Y. Shoes Industry Co., Ltd.?

Yuan: All the shoes seized by the public security authorities were produced by Y. Shoes Industry Co., Ltd. The "ZZZ" and other letter mark on the shoes were also sprayed or molded by Y. Shoes Industry Co., Ltd.

Xia: What is the source of the materials for the shoes seized by the public security authorities from Y. Shoes Industry Co., Ltd.?

Yuan: The materials for the shoes were purchased by me from the Guangzhou shoe material market and brought back to Y. Shoes Industry Co., Ltd. for shoe production.

Xia: Who is responsible for using ink or molds to make the "ZZZ" letter mark?

Yuan: I do not know the names of the workers who used ink or molds to make the "ZZZ" letter mark at Y. Shoes Industry Co., Ltd.

Xia: When did you start producing the shoes with the "ZZZ" letter mark seized by the public security authorities?

Yuan: We started producing the shoes with the "ZZZ" letter mark in September 20XX. During this period, Y. Shoes Industry Co., Ltd. produced more than 2,000 pairs of shoes with the "ZZZ" mark.

Xia: How many of the shoes with the "ZZZ" letter mark have you sold?

Yuan: We have not sold any of them.

Xia: Does Y. Shoes Industry Co., Ltd. have the right to use the "ZZZ" mark?

Yuan: At the time we used the "ZZZ" mark to make the shoes, we had not yet obtained authorization to use it.

Xia: Who were the personnel involved in making the shoes with the "ZZZ" mark at Y. Shoes Industry Co., Ltd.?

Yuan: There are seven or eight processes involved in making shoes, and all the workers in our factory participated in one of these processes.

Xia: Who distributes the workers' wages at Y. Shoes Industry Co., Ltd.?

Yuan: My uncle Yuan C. distributes the workers' wages.

Xia: Do you have anything else to add?

Yuan: No.

Xia: Is everything you have said true?

Yuan: Everything I have said is true.

This interrogatory was an-anti climax compared to the raid action and the arrest. The police did not press Mr. Yuan very hard. On reason is that part of the investigative work will be based on the documents accounting books and records found at Y. Shoe Industry Co. Ltd.'s premises. If Mr. Yuan lied to the officer, he will need to respond to that later. The case ended with an indictment to two and a half years in prison for Mr. Yuan and his uncle and a fine for the company. The records and evidence we collated later from the procurator and during the trial did indeed show that the target was financially broke and there was no damages to be recovered. Indeed Y. Shoe Industry had taken the hit to cover the masterminds behind the organization of which the factory was one of the many and easily replaceable components.

I leave the readers to their considerations and I am happy for any comments or thoughts you would like to share about this story or about your own stories of similar cases.