A group of three people was caught smuggling, manufacturing and trading some 50,000 counterfeit products including designer handbags, the Korea Customs Service said Thursday.

The total market value of the original items is estimated at over 50 billion won ($43.4 million).

The three are suspected of distributing replicas which they smuggled from China or produced in Korea through retail dealers in Itaewon, Namdaemun, Busan and Jeju since January 2010. Some were sold to insurance companies to be given as gifts to customers.

Customs officials raided their factories and warehouses in Seoul and Gyeonggi Province last month and confiscated about 24,000 items.

The Seoul Main Customs office of the KCS said it transferred the case to the prosecution.

The group faked about 20 different brands including foreign designer labels such as Louis Vuitton, Chanel and Gucci as well as Korean brands including Bean Pole and MCM. Counterfeited items included handbags, wallets, sunglasses, watches and accessories.

They even made catalogues showing the replicas under names like the “Kim Tae-hee bag” or the “Ko So-young bag” tagging the names of celebrities who carried similar items in TV dramas.

The original Chanel bag called the “Kim Tae-hee bag” costs 5 million won, but the replica was sold at around 200,000 won.

“The recent trend in the counterfeit industry is to produce top grade replicas in China, where law enforcement against piracy is relatively lax, and lower-quality products in Korea,” a customs official said.

“Chinese-made counterfeit products are no longer of low quality.”

The customs office said it will tighten customs clearance to block the smuggling of fake products and put in more resources to crack down on violations of intellectual property rights.

By Kim So-hyun (sophie@heraldcorp.com)