A 44-year old Chinese man has been sentenced to more than three years in prison after pleading guilty to smuggling fake Apple-branded products into the US from China.
Jianhua “Jeff” Li, 44, who has been living in the US on a student visa, conspired with three other people to smuggle more than 40,000 fake electronic devices and accessories into the US, according to the Department of Justice. He pleaded guilty to the charges in February 2018.
Li brought Apple branded iPads and iPhones, along with labels and packaging, into the US, making an estimated $1.1m from the scam over a five-year period.
Li, working through his company Dream Digitals, conspired with Andreina Becerra, Roberto Volpe and Rosario LaMarca, who also pleaded guilty to their roles in the conspiracy. LaMarca is serving a 37-month term after being sentenced in 2017, while Volpe was sentenced to 22 months and Becerra got three years of probation last October.
According to court documents, Li shipped the knock-off devices separately from the fake labels to assemble later in order to avoid detection from US Customs and Border Protection. The devices were then shipped all over the US for resale to unsuspecting customers who believed the devices were legit.
Proceeds from the sales of the devices were funnelled back to the co-conspirators’ accounts in Florida and New Jersey via structured cash deposits to avoid detection, and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.Li was charged and taken into custody in 2015.
Earlier this year, a student accused of fraudulently submitting thousands of repair requests to Apple using counterfeit iPhones pleaded guilty to the charges. Quan Jiang agreed to pay $200,000 in restitution to Apple ahead of his scheduled August 28 sentencing date, and also to forfeit a 2015 Mercedes-Benz seized by investigators.
Smartphones and accessories have been particularly popular with counterfeiters but in recent years there have been increasing issues with counterfeit chargers and batteries, which have been found to explode or catch fire, posing a safety risk.
An Apple investigation in 2016 found that almost 90 per cent of Apple-branded iPhone chargers and accessories on e-commerce platform Amazon were fakes.
And in 2017, an OECD report revealed that around one in five mobile phones shipped internationally are counterfeit, with smartphone batteries, chargers and memory cards also “increasingly falling prey to counterfeiters”.