DOJ: Chinese counterfeiter pocketed over $1M smuggling fake iPhones & iPads into the US

The United States Department of Justice announced today that a Chinese national living in the United States has pleaded guilty for his role in smuggling and distributing counterfeit iPhones and iPads from China into the United Staes…

Jianhua “Jeff” Li, 43, was living in the United States on a student visa and has pleaded guilty to one count of conspiracy to traffic counterfeit goods to smuggle goods into the United States, as well as one count of trafficking in counterfeit goods.

According to the court documents, Li conspired with several others, through his company Dream Digitals, to smuggle and traffic over 40,000 “electronic devices and accessories, including iPhones and iPads” into the United States. Furthermore, Li aided in smuggling labels and packaging containing counterfeit Apple trademarks.

The documents suggest that Li shipped the devices separate from the labels, thus avoiding detection by U.S. Customs and Border Protection officials. From there, the devices were shipped to conspirators “all over the United States.”

In exchange for that work, Li is said to have received payments totaling over $1.1 million in sales, funded directly into his bank accounts. Li didn’t act alone, rather working with Andreina Becerra, Roberto Volpe, Rosario LaMarca, and others. LaMarca was sentenced last year to 37 months in prison, while Becerra and Volpe are still awaiting sentencing.

The DOJ explains:

Further, the documents filed in this case and statements made in court showed that Mr. Li shipped devices separately from the labels bearing counterfeit trademarks for later assembly to avoid detection by U.S. Customs and Border Protection officials.

The devices were then shipped to conspirators all over the United States.  Proceeds from the sales of the devices were funneled back to the co-conspirators’ accounts in Florida and New Jersey via structured cash deposits and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.

This is an incredibly elaborate scheme, but one that’s common all around the world. A few years ago, we took a deep dive into the market for counterfeit Apple products – some of which were far more convincing than others.

The DOJ’s full announcement can be read below.

Chinese National Pleads Guilty to Conspiracy and Trafficking of Counterfeit Apple Goods Into the United States

A Chinese national living in the United States on a student visa pleaded guilty today for his role as a counterfeit distributor in a scheme to traffic and smuggle counterfeit electronics purporting to be Apple iPhones and iPads, from China into the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Craig Carpenito of the District of New Jersey, Deputy Special Agent in Charge Michael S. McCarthy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Newark and Acting Bergen County Prosecutor Dennis Calo made the announcement.

Jianhua “Jeff” Li, 43, pleaded guilty before U.S. District Court Judge Kevin McNulty of the District of New Jersey to one count of conspiracy to traffic in counterfeit goods and labels and to smuggle goods into the United States, and one count of trafficking in counterfeit goods. Li will be sentenced on May 30.

According to the documents filed in this case and statements made in court, from July 2009 through February 2014, Mr. Li, working through his company Dream Digitals, conspired with Andreina Becerra, Roberto Volpe, Rosario LaMarca, and others to smuggle and traffic into the United States from China more than 40,000 electronic devices and accessories, including iPads and iPhones, along with labels and packaging bearing counterfeit Apple trademarks. Mr. Li also received payments totaling over $1.1 million in sales proceeds from U.S. accounts into his bank accounts. Becerra, Volpe and LaMarca have also pleaded guilty to their roles in the conspiracy. LaMarca was sentenced on July 20, 2017 to 37 months in prison and Becerra and Volpe are awaiting sentencing.

Further, the documents filed in this case and statements made in court showed that Mr. Li shipped devices separately from the labels bearing counterfeit trademarks for later assembly to avoid detection by U.S. Customs and Border Protection officials. The devices were then shipped to conspirators all over the United States. Proceeds from the sales of the devices were funneled back to the co-conspirators’ accounts in Florida and New Jersey via structured cash deposits and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.

The HSI Newark Seaport Investigations Group and the Bergen County Prosecutor’s Financial Crimes Unit investigated the case with significant assistance from Europol and Italy’s Guardia di Finanza.

Senior Trial Attorney Kebharu Smith of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Leslie Schwartz of the District of New Jersey are prosecuting the case.


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