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We are on a secret mission, my friend Leslie and I. We are trolling the suburban streets of San Leandro, looking for an address given to me by a stranger I met on the Internet. After parking way down the street so no one will spot my car, we walk nervously up the front path toward one of those nondescript apartment complexes that seems to have taken its architectural cues from a Motel 6. The screen door is closed and we can't see through it, but we can hear women laughing. We're uneasy and quiet because we are about to do something illegal. We are attending a purse party.

Never heard of a purse party? Think of it as a black-market Tupperware party, but instead of dealing in salad bowls, the women who host them are shilling fake Burberry, Gucci, Prada, and Louis Vuitton. It might sound no more threatening than a toy poodle cartel, but because the handbags sold at these parties are almost entirely bootlegged versions of those made by high-end fashion houses, and because many of them are spirited into the country from abroad, the popular phenomenon falls within the broad criminal categories of counterfeiting and smuggling and is therefore the sort of thing that could go down on your permanent record.

The people who deal in fake handbags and other luxury apparel items are doing so at incredible volumes. The top five types of counterfeit merchandise smuggled through the ports in Oakland and San Francisco are, in order, handbags, clothing, watches, wallets, and cell-phone covers. All can be readily purchased at your neighborhood purse party for a fraction of the price of the original -- genuine designer handbags typically run $200 to $1,000 a pop.

All of this makes purse parties of more than passing interest to the federal government, which in recent years rolled customs enforcement into the deadly serious Department of Homeland Security. Yet purse parties usually escape law enforcement scrutiny. For one thing, busting them is a much lower priority than catching the smugglers and manufacturers. For another, it's not that easy to get invited. It helps if you're a girl who really likes purses -- something these G-men clearly are not.

Invitations to purse parties are usually passed by word of mouth among friends, family, and co-workers. Organizers also advertise on Web sites such as Craigslist, but they aren't looking for new guests -- they're looking for party hosts. You supply the location, bring in your friends and family as customers, and the organizers will supply the bags. They do it this way partly to make sure anyone who comes to the parties has a stake in the business or is known to the host -- and partly because the whole phenomenon has a sales-pyramid aspect.

Top distributors profit from purse sales made by the hosts, who in turn profit if any of their guests hold their own parties later. Hosts sometimes get a cut of the cash, although more often they're paid in free handbags, sunglasses, jewelry, or other merchandise. The more merch they or their recruits move, the greater the rewards. As a result, there is a serious drive to bring in as many new hosts as possible.

So every time I approached a purse party organizer online asking to be added to a guest list, she politely but firmly insisted that I host. Any excuse I made for why I couldn't hold a party at my house was quickly batted down. "How about at your mom's house?" they would press. "How about your office?"

After about a half-dozen rejections, someone finally sent me an invitation, promising a party with cocktails, appetizers, and even a layaway plan. Leslie and I hit the road.

Just one problem: Like the G-men, I am not a girl who likes purses. The only thing I own that resembles one is a battered and lumpy messenger bag whose defining feature is a large maple syrup stain incurred in an Eggo-related incident in '97. I am convinced this will instantly blow my cover as a spy in the House of Handbags, so for disguise purposes Leslie, the most fashionable person I know, has outfitted me with a sedate black Prada -- a fake, naturally. I try to remember to push it nonchalantly behind one shoulder instead of clutching it in both hands like a little girl with a death grip on an Easter basket.

If getting on the list for a purse party was tough, getting into the party proves easy. We just push open the screen door and walk in. A dozen women, mostly in their twenties, are milling around a living room transformed into an indoor swap meet. There are several card tables upon which women have set up displays for their own small businesses selling silver jewelry, candles in disconcerting animal prints, Body Shop cosmetics, and fruit-scented massage oils and body glitter. When Leslie and I mosey over, the proprietor whips out catalogues from which we can order gummy candy handcuffs and other less G-rated merchandise that isn't on display because, we're told, this is a kid-friendly party.

There are, in fact, a few moms here with toddlers, and a table of toys has been set out for their amusement. There are the promised appetizers (a grocery-store vegetable platter) and cocktails (several unopened bottles of vodka).

And then there's the main attraction: neat rows of imitation Burberry, Gucci, Hermès, and Prada purses. A larger display shows off the Vuittons, particularly the popular "monogram multicolore" design, in which the company's distinctive "LV" logo, usually reproduced in a sedate gold on brown, appears in an eye-popping rainbow of colors on white leather. The purses have oversize pink and white price tags, all marked from $25 to $60.

It's pretty well accepted in this world that you'll get what you pay for. Take the Vuitton wallet we find for $30 -- the real thing sells for $285. Leslie whispers to me about the poor print job, in which the green parts of the design don't show up for lack of ink. A genuine Gucci would set you back $600 to $4,800, and when I pick up the $35 version, Leslie doesn't even recognize the design -- she thinks the counterfeiters just glued a Gucci label to a purse of their own creation. She shows me the inside, which has a cheap fabric lining and none of the labels, stamps, or serial numbers a real designer purse would have to prove authenticity. These purses are wrapped in thin clear plastic and stuffed with tissue paper -- the real deal would have its own carefully fitted dust bag for protection.

But people seem to be here for the bargains and the camaraderie, not because they're fashion experts. Leslie is horrified when a bunch of women begin debating if the "G" pattern on a certain bag is for Gucci. She points out that it's for the more déclassé Guess, and they look at her in glum disappointment.

Between Leslie's authoritative appraisal of the merchandise and what I'm hoping is my masterful sporting of the borrowed Prada, we quickly attract the attention of our evening's hosts, a pair of bubbly Asian women in their mid-twenties wearing identical hot-pink T-shirts and black pants. One of them immediately begins to pitch us about hosting our own parties. She promises that they'll do all the work: supplying the purses, setting up the displays, even giving us the price tags. If we want, the candle lady, Body Shop lady, and sex toy lady will come along, too. We'll be paid in handbags -- the more we sell, the more we'll get.

This is great! We're in the loop! But then I pretty much blow the mood of disclosure by asking where, exactly, the bags come from.

"We have several distributors," our host replies, suddenly very prim.

And who might those distributors be?

She laughs prettily, then flicks off the humor and gives us a weird clenched-teeth smile. "I could tell you," she says, "but then I'd have to kill you."

• • • •

It's doubtful that anyone has actually been killed for knowing too much about the purse underworld. After all, party participants are open about the fact that they are buying and selling fake goods -- very few customers are crying foul, and our jails are not full of handbag wranglers. But the federal government would like to assure you that dealing in fakes is indeed a crime. "There seems to be some misconception in the general public that as long as you tell people it's a fake that it's okay to sell it," says Mike Baxter, the fraud group supervisor for the Bay Area's Immigration and Customs Enforcement office. "It's not -- it's still illegal to traffic in counterfeit goods."

What's the harm? It's not as if we're talking about brake pads, prescription drugs, or airplane parts -- all frequently counterfeited items for which poor quality control can lead to horrific consequences. The worst that might happen with purses is that the stitching will fall apart, or their cheap leather straps will break, or maybe a crummy dye job will stain your skin and clothes.

The point, authorities say, is not what the purse will do to you, but what it's doing to someone else. The knockoffs, they say, may be the result of sweatshop labor. And while the purse party ladies appear benign, they could be funneling profits to people who aren't so nice. Counterfeiters, the feds point out, may be using the fake-purse trade to launder money for organized crime; it's also an attractive option for former narcotics smugglers looking to trade a less risky product. "You get caught with ten thousand pounds of counterfeit goods, the penalty will be less than if you get caught with ten thousand pounds of crack," says Darren Pogoda, staff attorney for the International AntiCounterfeiting Coalition. "It's a low-risk, high-reward type of venture. They produce these products for almost nothing, sell them for a significant chunk of change, and don't have any taxes or advertising or research or 401Ks for their employees to worry about."

The other ostensible victims are the designers whose trademarks are being copied. Counterfeiting may cut into their sales a little but, far more important to a fashion house, the fakes degrade the prestige of their brands. Two of the most frequently copied handbag designers -- Coach and Kate Spade -- have detailed information on their corporate Web pages telling consumers how to report fakes, and warning that their products are never legitimately sold at parties, through online auctions, or on the street. "The counterfeiters illegally profit at the expense of Coach and affect the entire economy through lost revenues and taxes," the Coach Web site states. "Counterfeiters do not typically honor safety and environmental regulations, namely child labor and antisweatshop laws. Without a doubt, the high quality of workmanship embodied in genuine Coach product is not duplicated in counterfeit product; counterfeit quality is typically poor."

But the design houses are reluctant to discuss how counterfeiting affects their sales or how they work with the feds to counteract it, perhaps for fear that publicizing the problem will further taint their brands. Of the six major designers contacted for this story, the only response came from Burberry, whose London-based spokesman Robert Gardener commented by e-mail in the blandest of terms: "Unfortunately, counterfeiting is something which affects all luxury goods companies, especially those with iconic recognition," he wrote. "Burberry takes this extremely seriously and pushes for the heaviest penalty for those found responsible in any counterfeiting of the brand."

To their credit, the authorities realize that fake-purse buyers couldn't care less about the financial woes of fashion designers that charge extraordinary sums for their brands -- Burberry's bags, for example, retail from $225 to $1,350. Instead, the law enforcers talk about how bootlegging affects the fashion houses' rank and file, who suffer when fewer people buy the real products. "It may seem like a very victimless, benign enterprise, but it can have an impact on our overall economy and jobs," says US Customs spokesman Mike Fleming. "Not just the profit margins and revenues for large high-end manufacturers, but the people who work there, or who have subsidiary-contracted jobs to make these products."

All this talk of work loss rings of hype until you consider the sheer volume of the illicit handbag trade. Fred Gassert, who supervises the Intellectual Property Rights unit for the US Customs and Border Protection office in San Francisco, says that in the fiscal year that ended this August, his unit made 157 busts and took in about $17 million worth of fake purses. "That's not the manufacturers' suggested retail price," he notes. "If the goods were actually legitimate, the value of that would probably be closer to eight to ten times more."

And that's just local seizures. Nationally, fake purses are the third most-seized item on the list of counterfeit goods (after clothing and cigarettes) and account for about 11 percent of the total goods intercepted. A large number slip through Customs, however -- you'll be seeing a lot of them in the upcoming months, as shipments of all types of knockoff goods flood local ports in anticipation of the Christmas season. "Within the next sixty days you'd be dazzled by the stuff you can find just walking into stores," Gassert says.

Why handbags? Well, they don't require a lot of sophistication to copy, at least not if you skimp on materials and workmanship. They can be made on the cheap and sold at a considerable profit while remaining a bargain compared to the originals. They're fairly small, which makes them easy to smuggle. And they're always in high demand. Part fashion statement, part status symbol, the handbag is an infinitely collectible object of desire with an appeal that bridges race, age, and economic class. Many enthusiastic collectors don't even try to pass their impostors off as real -- they're happy with the fakes. Some even proudly consider their "replicas" or "designer-inspired" bags an indicator of thriftiness and good fashion sense.

The Bay Area's Pacific Coast location puts us on the receiving end of a packed pipeline of counterfeit goods from Asia, largely China, Hong Kong, Vietnam, the Philippines, and Thailand. Impostor handbags arrive in every conceivable way -- stuffed inside cargo containers supposedly containing something else, shipped via parcel services like FedEx, or brought ashore by airline passengers carrying suitcases full of contraband.

But faux-designer bags are also produced here in California. Customs agents often seize shipments of forged designer labels and tags, meant to be stitched onto items produced in-state. Because counterfeiting and smuggling operations are often fly-by-night, springing up and then disappearing in rhythm with product trends, there's no single model for how they operate. Some fakes are produced by organizations entirely dedicated to counterfeiting, while others come from contractors doing a legitimate run of a product for a high-end designer, but whose employees save some tags to later sew into fakes. The majority of counterfeit producers, says Customs supervisor Baxter, are probably just small factories that will take jobs from anyone. "Someone comes and asks for something to be made and they make it," he says. "If they were to ask them to make legitimate products, they would."

When it comes to revealing the tactics they use to pursue the fake-handbag syndicate, both federal agents interviewed for this story were about as tight-lipped as the high-end fashion houses they work with. But both were extremely eager for details about the purse parties to which they have never been invited. Because the parties haven't been very thoroughly investigated, it's unclear how the handbags that escape Customs enforcement make it to the party organizers. Presumably the big smugglers get them to smaller distributors, who sell them to the party organizers, who deliver them to the hosts. Because the parties are at the bottom of the food chain and seldom feature more than a couple hundred purses, the authorities concentrate their resources on the bigger fish. Purse parties have been busted, Pogoda says, but it's rare.

Thus left to their own, the parties have flourished, thanks in no small part to the Internet, which has proved helpful for organizing the events, not to mention as an outlet for direct sales via sites such as eBay. The easy anonymity of the Web and the fact that purse parties are held in private homes where hostesses can screen their clients helps shield the distributors from law enforcement. "You can invite anyone you want into your house," Pogoda notes, "whereas if you're operating a stall on the street or a shop somewhere, anyone can walk in, investigators can make buys, anyone can drive by and take pictures."

• • • •

All the gloom and doom about lost jobs and copyright law and sweatshop labor is a downer to handbag collectors, for whom an important part of the purse party's allure is that it's a party. The sales events are often marketed as a girls' night out with snacks, drinks, games, and raffles. "Get the girls together and have a purse party for fun," reads one recent Craigslist solicitation. "You could even help the girls start their Christmas shopping early while you're socializing and having a good time in the privacy of your own home!"

It's also not uncommon for other shop-at-home vendors to be invited to sell their products at the party, or for the hosts' friends to sell handicrafts like homemade jewelry or knitted accessories, turning it into a sort of crafts fair for beauty-oriented cottage industries. Party organizers often solicit new hosts by portraying hosting as a woman-oriented at-home business. "Be your own boss, work your own hours and determine your own income!" reads another recent ad. "Our company was created by a stay-at-home mom for stay-at-home moms! You will have the freedom that you've always dreamed of by hosting as little as one party a week. Our average parties run between $500 and $1,000 in gross sales."

Despite the apparent popularity of the parties, getting handbag aficionados to discuss them on the record is tough -- these women know what they're doing is illegal. When three vendors selling fake designer handbags were busted this summer at a festival in Tracy, it sent worried ripples through the East Bay purse-party community, and made people reluctant to talk with the press.

Giselle, 25, of Antioch, agreed to be interviewed if only her first name was used. She has hosted a purse party, and about once or twice a month assists a friend who regularly organizes them. Her friend is a single mom trying to supplement her income. "If it's helping her pay her childcare and not be on the welfare system, I don't see the harm," Giselle says.

Like many other collectors, Giselle is aware that fake purses violate copyright law, and feels a little squeamish about the alleged links between counterfeiters and sweatshops or drug dealers. But she has no sympathy for the fashion industry. "Not everyone can afford a freaking $1,000 purse," she snorts. Her argument is similar to those you'll hear from online music swappers: Demand for the illegal copy drives up demand for the real thing. "You're marketing the real deal by carrying around a lookalike," Giselle says. "This is how I look at it: I'm 25. My mother, who is fifty, can afford the real purse. I had one of the knockoff Vuittons a year ago -- it was a really good replica, and my mom liked it so much that she went out to the store and bought the real purse."

Other fake-purse fans have their own rationales. Take Meghan, a 26-year-old Alamedan who owns more than one hundred purses, about a third of them designer replicas, the rest no-name originals. She's been to one purse party and is considering hosting her own. "I would never buy a real one," she says of the designer bags. "It's the money. I'd rather spend three or four hundred on a trip, not on a purse."

For Meghan, the magic of the purse party is being able to afford a wide variety of handbags, and have the designs that no one else has. "I'm really into quantity rather than quality," she says. "I like to have tons of different purses to have something unique for each outfit. You get what you pay for, and forty or fifty dollars a purse is still quite a lot of money for some people. If you're just looking for something cute to wear on a Friday night or to work, then why not have a knockoff?"

Both women say their interest in hosting is less about cash and more about staging an event so they can get together with co-workers or extended family, and maybe hook up with some new people. "The money's not that great," Giselle admits. But, she adds, "I've met two or three friends from just booking these parties."

She's hitting on the very thing that makes purse parties a savvy business model: Women are fantastic networkers. Amway, Avon and, of course, Tupperware have done amazingly well by tapping into these social networks and crafting sales events as girly get-togethers. The hipster generation is simply turning out to be more interested in faux couture than the plastic casserole dishes that enthralled its predecessors. As Meghan puts it: "Who gives a crap about Tupperware anymore?"

• • • •

Since the feds don't have much firsthand information to offer, and since a true understanding of the purse-party gestalt seems to be something acquired only through personal experience, there's just one thing left to do: throw a purse party. My friend -- let's call her "Janet" -- kindly volunteers her backyard and offers to be the go-between with a purse distributor. We respond to a Craigslist posting, invite our friends, set out snacks, crank the tunes, and then wait for the purses to arrive.

Soon enough, we hear the crunch of van wheels on gravel, and two young woman in velour tracksuits -- our purse lady and her assistant -- hustle into the yard lugging enormous shopping bags and plastic bins teeming with brightly colored knockoffs. The folding table we've provided can't hold all the purses, so the women just throw the bins and bags on the grass for us to root through.

All the big names are here: Coach, Prada, Kate Spade, Chanel, Dooney & Bourke, Marc Jacobs, Burberry. There are somber file-folder-sized black totes for office work, delicate monogrammed handbags for evening wear, and gaudy, plastic orange and lime-green bags studded with fake rhinestones that nobody can quite figure out. Prices range from $25 for a hot-pink imitation Gucci clutch to about $100 for a fake gold Theda, Vuitton's "It purse" of the season, a baroque horror that is all scalloped edges and woven leather stitching. A real Theda would fetch $1,750 to $6,450 in stores, depending on size and fabric.

Our purse supplier, a petite Latina in her early twenties with a head of reddish curls and a startling pair of shiny gold sneakers, is more than happy to dish about the details of her business. Her Kate Spade replicas are made in the United States, she says, and the rest of her inventory comes from Hong Kong and Korea. She makes about $10 per bag, and generally sells about $800 in purses per party. This is not her main job; she does it to supplement what she makes as owner of a small clothing store. She prides herself on the quality of her bags, which she claims are indistinguishable from the real thing. And she genuinely loves purses -- if the gold Theda doesn't sell today, she says a bit sheepishly, she's taking it home for herself.

As the purse lady sits on the grass, ringing up sales with the help of a portable credit-card reader and a cell phone with a Vuitton plastic cover, she confirms something apparent from recent Craigslist postings: that the Bay Area purse-party game is a fractious and competitive one, with each organizer claiming that she carries the most authentic-looking bags. Some of the women even use the popular Web site to trash each other's products and services, alleging that their rivals take money for preordered items and never deliver the goods. Hosts, meanwhile, have complained of having arranged parties only to have purse dealers stand them up. Our lady claims she, too, has been ripped off -- by customers who bounced checks or used fake credit cards. She now gets suspicious if anyone buys more than three bags.

But she's decided we're a creditworthy lot, so she won't even ask us for ID, she says. Indeed, the party has a genuinely relaxed vibe. The guests warmly praise one another's choices and model handbags for their friends, checking themselves out in a full-length mirror Janet has propped up for them. When they're not browsing, they gather around the picnic table, chatting about their jobs and travel plans. One of the guests has brought her own crocheted scarves and hats to sell, and there's a good deal of cheering when she makes her first sale.

When it comes time to tally the receipts, Janet's cut is modest -- she'll get a 10 percent credit toward her own bag based on how much merchandise is sold. The group racks up $400 in sales, so Janet gets a $40 discount. There's a raffle for a free bag (Janet conveniently draws her own name), then suddenly it's all over. The purse suppliers pack up their van and scoot, not having made much of a profit after selling only a half-dozen bags, but seemingly pleased to have met several potential new party hosts.

Despite having voyaged into the belly of the purse party beast, I still don't understand the allure of fake handbags, particularly ones with highly dubious origins. But by that day's end, lying around in the sun, chatting with old friends and new acquaintances, and downing the leftover cookies, I have to admit I'm not totally immune to the charm of the purse party. Maybe the ostensible reason for their proliferation is the thrill of buying illegal knockoffs, but the real driving force behind this international crime syndicate may simply be women's desire to get together and enjoy one another's company.

It's the one thing about purse parties that isn't fake.