Louis Vuitton’s Netherlands unit has agreed to pay a €500,000 settlement after Dutch authorities concluded the company failed to adequately vet customers who repeatedly made large cash purchases over a prolonged period, The New York Times said. 

In a statement on Thursday, prosecutors said the Dutch branch of the French luxury brand did not “adequately verify the identity of customers who repeatedly spent large sums of cash over an extended period.” Louis Vuitton’s failure to flag the purchases violated the country’s anti-money-laundering and counterterrorism financing law, according to the report. 

Prosecutors began examining the company last summer while investigating a separate case involving a Chinese woman accused of laundering millions of euros through purchases at Louis Vuitton stores, NYTreported. 

Investigators have accused the 36-year-old woman of laundering more than €2 million between September 2021 and February 2023. Prosecutors said she bought expensive bags in the Netherlands with illicit funds received from another person and shipped the items to China in cardboard boxes for resale, making the proceeds appear to come from legitimate trade.

Identified as Bei W., she remains on trial along with two other defendants: a woman accused of helping track the purchases and a man who worked for Louis Vuitton at the time and is accused of helping keep transactions below the 10,000-euro threshold that triggers cash-transaction reporting obligations, according to NYT.  

The alleged scheme used a surrogate shopping system known as “daigou,” in which buyers abroad purchase goods for someone in China, often exploiting price differences and, for luxury products, reducing concerns about authenticity, the newspaper said. 

Read more at The New York Times