Shein hit With Lawsuit Citing RICO Violations, A Law Originally Used Against Organized Crime

Shein, China’s fast fashion shop, is facing a lawsuit alleging that the garment company’s copyright theft is so brazen that it amounts to racketeering.

According to the filing this week, Shein is in breach of the Racketeer Influenced and Corrupt Organisations Act, also known as RICO, designed to prosecute organized crime.

“Shein has grown rich by committing individual infringements over and over again, as part of a long and continuous pattern of racketeering, which shows no sign of abating,” according to the petition.

According to the lawsuit, the company uses a “byzantine shell game of a corporate structure” to rip off designers in an organized attempt to generate as many as 6,000 new goods each day, a concerted illicit operation that may best be combated through the application of RICO legislation.

The case is only the latest in many challenges for x. In May, a bipartisan group of two dozen senators petitioned the Securities and Exchange Commission to halt Shein’s IPO unless it could prove it does not use forced labor from the country’s mostly Muslim Uyghur community.

The case, filed in the United States District Court for the Central District of California by three fashion designers, claims that “Shein produced, distributed, and sold exact copies of their creative work.”

“At issue here, inexplicably, are truly exact copies of copyrightable graphic design appearing on Shein products,” according to the civil claim.

Shein has yet to respond to a request for comment on Friday.

Shein, China’s fast fashion shop, is facing a lawsuit alleging that the garment company’s copyright theft is so brazen that it amounts to racketeering.

The designers seek unspecified monetary damages and injunctive relief to deter additional racketeering activities.

The company has yet to state if it intends to go public this year, but there are reports that the business is raising funds in preparation for a listing in the United States before the end of the year.

Shein spokesperson Peter Pernot-Day stated that the company values transparency throughout its supply chain.

However, a Congressional investigation released last month leveled a scathing attack on Shein and another Chinese clothes retailer, Temu.

The study is part of an ongoing Congressional investigation into products sold to American consumers that may have been manufactured in China using forced labor. As part of the investigation, the committee addressed letters to Nike, Adidas, Shein, and Temu in early May, requesting information about their compliance with the anti-forced labor statute.

According to the comany, the company’s “policy is to comply with the customs and import laws of the countries in which we operate.” It further stated that it has “zero tolerance” for forced labor and has established a strong mechanism to ensure compliance with US law.

SOURCE – (AP)