Anti-counterfeiting group IACC suspends Alibaba

Counterfeiting issues, conflict of interest send Alibaba out-the-door

May 13, 2016, Los Angeles, CA - Just a week before Alibaba founder Jack Ma's scheduled appearance as a speaker at the International Anti-Counterfeiting Coalition ("IACC") spring conference in Orlando, the IACC suspended Alibaba in response to an uproar by some companies that view the Chinese e-commerce giant as the world's largest marketplace for fakes.

Fakes damage companies' bottom lines, dupe consumers who unknowingly buy such products, and feed a vast underground money-laundering industry that supports criminal syndicates. Counterfeiting is now the largest criminal enterprise in the world.

The Associated Press reported that IACC president, Robert Barchiesi, had stock in Alibaba, had close ties to an Alibaba executive and had used family members to help run the coalition. According to AP, the IACC's tax filings show that, in addition to the ties to Alibaba, Robert Barchiesi runs his organization like a family business. The coalition paid companies founded and run by one of Barchiesi's sons nearly $150,000 from 2012 to 2014 for rental costs, accounting, IT support and advertising. Though the coalition attests that its financial statements were reviewed by an independent accountant, tax filings show the accounting firm was owned by Barchiesi's son. The IACC employs the son's wife, Kathryn Barchiesi, as a program manager.

"It's crossed the line ethically," said Deborah Greaves, a partner at Brutzkus Gubner law firm and a coalition board member from 2011 to 2013. She said she didn't know that IACC chief Robert Barchiesi had stock in Alibaba until informed by the AP. "Really problematic," she said.

Michael Kors' general counsel has called Alibaba "our most dangerous and damaging adversary." In recent weeks Gucci America, Michael Kors and Tiffany have quit the Washington D.C.-based coalition, which has more than 250 members.

In an IACC Board letter, the board said that as a result of members' concerns, it was suspending a new class of membership under which Alibaba had recently joined.

View the complete story by Erika Kinetz and Desmond Butler reported from Washington. AP news researchers Jennifer Farrar in New York and Monika Mathur in Washington contributed to the report.