Chinese counterfeiter made over $1.1M trafficking phony iPhones, iPads in US

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A Chinese national living in the U.S. on a student visa will be sentenced in May after pleading guilty to conspiracy and trafficking of counterfeit Apple products including iPhones and iPads, a scheme for which he earned more than $1.1 million.


Counterfeit Apple products seized by Maryland police as part of a separate case in 2013.


According to the U.S. Department of Justice, Jianhua "Jeff" Li, 43, pleaded guilty on Friday to one count of conspiracy to traffic counterfeit goods and labels and smuggle said goods into the U.S., and one count of trafficking counterfeit goods.

Li, along with fellow conspirators Andreina Becerra, Roberto Volpe, Rosario LaMarca, and others, operated a smuggling and trafficking ring through Li's company Dream Digitals from July 2009 through February 2014. Under the scheme, the cohort conspired to bring more than 40,000 phony devices, including iPhones and iPads, as well as labels and packaging into the U.S.

Documents show Li received more than $1.1 million in sales proceeds from the endeavor.

To avoid U.S. Customs and Border Protection scrutiny, Li and his band of conspirators shipped in the various necessary components separately; iPhones and iPads came in one shipment, labels with counterfeit Apple branding in another. Li would then assemble the packages and send them out to comrades "all over the United States."

Further obscuring his operation from officials, Li diverted funds received to co-conspirators' bank accounts located in Florida and New Jersey. A portion of proceeds was also transferred to collaborators in Italy.

It took the cross-jurisdictional collaboration of the HSI Newark Seaport Investigations Group and the Bergen County Prosecutor's Financial Crimes Unit, along with help from Europol and Italy's Guardia di Finanza, to successfully uncover the crime.

All of Li's three named partners have pled guilty, with LaMarca sentenced last July to 37 months in prison. Becerra and Volpe are awaiting sentencing, while ringleader Li is scheduled to hear his fate on May 30.

As a purveyor of the world's most desirable tech products, Apple has grappled with counterfeiters. Much of the company's troubles stem from China, a country known for rampant counterfeiting, though fake iPhones and iPads do pop up on occasion in the U.S.
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Comments

  • Reply 1 of 31
    jd_in_sbjd_in_sb Posts: 1,479member
    What exactly is a fake iPhone? An android with a iPhone-like body and skin?
    longpathmarkbyrnwatto_cobraracerhomie3bonobobravnorodomRobPalmer9jbdragonairnerdjony0
  • Reply 2 of 31
    Prison's not so bad, three meals a day, a roof over your head...and all the sex you could possibly want. :)

     
    watto_cobraracerhomie3jbdragontokyojimujony0
  • Reply 3 of 31
    zoetmbzoetmb Posts: 2,296member
    Did these phones work?  Did they use iOS?  Was it obvious looking at them that they weren't real Apple products?   Did they sell them to individuals or to retailers?  

    Li would then assemble the packages and send them out to comrades "all over the United States."
    Comrades???   There's a pretty biased implication there.
    oseamejdwwatto_cobraadm1
  • Reply 4 of 31
    netroxnetrox Posts: 607member
    I wonder exactly how does he manage to make counterfeit iPhones as well.
    watto_cobra
  • Reply 5 of 31
    I think its hilarious actually, that those trying to save money ended losing everything on a fake.

    If you want a low cost iPhone buy an iPhone 6S from the online Apple Store.
    ronnwatto_cobra
  • Reply 6 of 31
    SoliSoli Posts: 7,847member
    jd_in_sb said:
    What exactly is a fake iPhone? An android with a iPhone-like body and skin?
    netrox said:
    I wonder exactly how does he manage to make counterfeit iPhones as well.
    zoetmb said:
    Did these phones work?  Did they use iOS?  Was it obvious looking at them that they weren't real Apple products?   Did they sell them to individuals or to retailers?  
    I assume they're something like this…



    1STnTENDERBITSjdwronnwatto_cobraGeorgeBMaclongpathJaiOh81anton zuykovjbdragonjony0
  • Reply 7 of 31
    wood1208wood1208 Posts: 1,478member
    Not bad. Made over $1M, sent to family and live in better prison than Chinese labor camp if convicted in China..
  • Reply 8 of 31
    I only buy Apple products through Apple store b/m or Apple online / app then I know they are genuine not fake.
    longpathwatto_cobra
  • Reply 9 of 31
    jd_in_sbjd_in_sb Posts: 1,479member
    Soli said:
    jd_in_sb said:
    What exactly is a fake iPhone? An android with a iPhone-like body and skin?
    netrox said:
    I wonder exactly how does he manage to make counterfeit iPhones as well.
    zoetmb said:
    Did these phones work?  Did they use iOS?  Was it obvious looking at them that they weren't real Apple products?   Did they sell them to individuals or to retailers?  
    I assume they're something like this…



    WOW!!! I had no idea fakes could be that good!!!
    jbdragon
  • Reply 10 of 31
    ronnronn Posts: 263member
    I just don't understand why anyone would risk buying a fake by going to a non-Apple, non-mobile shop. No one can legitimately think they're getting a genuine iPhone at a steep price drop from some one-off shop.
    watto_cobra
  • Reply 11 of 31
    SoliSoli Posts: 7,847member
    ronn said:
    I just don't understand why anyone would risk buying a fake by going to a non-Apple, non-mobile shop. No one can legitimately think they're getting a genuine iPhone at a steep price drop from some one-off shop.
    Maybe they don't live in a country with an Apple Store, or maybe these were sold to legitimate retailers as authentic devices from a fake, 3rd-party distributor. There are countless ways this can (has and will) happen. If you're going into an Apple Store then you're actually a bit spoiled with being able to buy directly from the vendor in this day and age.
  • Reply 12 of 31
    ronnronn Posts: 263member
    Soli said:
    ronn said:
    I just don't understand why anyone would risk buying a fake by going to a non-Apple, non-mobile shop. No one can legitimately think they're getting a genuine iPhone at a steep price drop from some one-off shop.
    Maybe they don't live in a country with an Apple Store, or maybe these were sold to legitimate retailers as authentic devices from a fake, 3rd-party distributor. There are countless ways this can (has and will) happen. If you're going into an Apple Store then you're actually a bit spoiled with being able to buy directly from the vendor in this day and age.
    It's not just from Apple stores. I'm sure even in countries without Apple stores, there are established mobile carrier shops and electronic/retail chains that sell iPhones. If you go into "Joe Blow's Shack" and see an iPhone at a discount, buyer beware. Of course, some probably know it's a knockoff and don't really care.

    Added: the referenced counterfeiters were selling in the States.
    edited February 3 watto_cobra
  • Reply 13 of 31
    SoliSoli Posts: 7,847member
    ronn said:
    Soli said:
    ronn said:
    I just don't understand why anyone would risk buying a fake by going to a non-Apple, non-mobile shop. No one can legitimately think they're getting a genuine iPhone at a steep price drop from some one-off shop.
    Maybe they don't live in a country with an Apple Store, or maybe these were sold to legitimate retailers as authentic devices from a fake, 3rd-party distributor. There are countless ways this can (has and will) happen. If you're going into an Apple Store then you're actually a bit spoiled with being able to buy directly from the vendor in this day and age.
    It's not just Apple stores. I'm sure even in countries without Apple stores, there are established mobile carrier shops and electronic/retail chains that sell iPhones. If you go into "Joe Blow's Shack" and see an iPhone at a discount, buyer beware. Of course, some probably know it's a knockoff and don't really care.
    And if "Joe Blow's Shack" is sold the devices ever so slightly under some other retailer that when they examine the unopened boxes of devices they look perfect and there's no red flag because there was no massive discount to the retailers to make it suspicious? What then? Should the first buyers be able to look at the packaging before they open it up and know it's a knockoff? What if it was a gift that wouldn't be opened for weeks?

    There are far too many possibilities and scammers that are for more intelligent than you give them credit for than to assume that every buyer, between end user and retailer, can stop all scams from taking place. I'm sure even Apple gets duped into using subpar components for various reasons and using conflict materials through forged documentation.
    GeorgeBMac
  • Reply 14 of 31
    metrixmetrix Posts: 213member
    My understanding is they are all over China, can you imagine how many phones Apple would really sell.
    ronnwatto_cobrajbdragon
  • Reply 15 of 31
    ronnronn Posts: 263member
    Soli said:
    ronn said:
    Soli said:
    ronn said:
    I just don't understand why anyone would risk buying a fake by going to a non-Apple, non-mobile shop. No one can legitimately think they're getting a genuine iPhone at a steep price drop from some one-off shop.
    Maybe they don't live in a country with an Apple Store, or maybe these were sold to legitimate retailers as authentic devices from a fake, 3rd-party distributor. There are countless ways this can (has and will) happen. If you're going into an Apple Store then you're actually a bit spoiled with being able to buy directly from the vendor in this day and age.
    It's not just Apple stores. I'm sure even in countries without Apple stores, there are established mobile carrier shops and electronic/retail chains that sell iPhones. If you go into "Joe Blow's Shack" and see an iPhone at a discount, buyer beware. Of course, some probably know it's a knockoff and don't really care.
    And if "Joe Blow's Shack" is sold the devices ever so slightly under some other retailer that when they examine the unopened boxes of devices they look perfect and there's no red flag because there was no massive discount to the retailers to make it suspicious? What then? Should the first buyers be able to look at the packaging before they open it up and know it's a knockoff? What if it was a gift that wouldn't be opened for weeks?

    There are far too many possibilities and scammers that are for more intelligent than you give them credit for than to assume that every buyer, between end user and retailer, can stop all scams from taking place. I'm sure even Apple gets duped into using subpar components for various reasons and using conflict materials through forged documentation.
    This scheme was in the USA. I would recommend people to buy directly from Apple (either online or in-person), a phone provider (AT&T, T-Mobile, Verizon, Sprint, etc) or a large retailer. If Joe Blow's is foolish enough to not deal with a reputable dealer, that's on them. I highly doubt there wasn't a discount and suspect that these one-off retailers were aware that they were selling knockoffs. In many immigrant nabes there are these rinky-dink shops that scam less savvy buyers with refurbished goods and knockoffs. And there are plenty of shops in tourists areas of New York that do the same. Sure this happens in many cities. Again, if you're offered something too good to be true...
    watto_cobra
  • Reply 16 of 31
    ronnronn Posts: 263member
    metrix said:
    My understanding is they are all over China, can you imagine how many phones Apple would really sell.
    That was my thought as well. These counterfeiters had family members in China. I imagine there are tons of counterfeits sold directly in China and thus impacting Apple negatively. Everyone remembers years ago with all the fake Apple stores. Some of them were allowed/ignored by Chinese officials. Greasing palms will do that.
    watto_cobra
  • Reply 17 of 31
    wood1208 said:
    Not bad. Made over $1M, sent to family and live in better prison than Chinese labor camp if convicted in China..
    Seriously $1.1M !!!! on a student visa ... way to go.
  • Reply 18 of 31
    metrixmetrix Posts: 213member
    I have been telling US companies to stop sending production to China for lower MFG costs for 25 years. In every case the Chinese duplicate the facilities and become their new competitor and practically force them out of business. I think you can get almost all software costing more than $20,000 for nothing there. 
    watto_cobra
  • Reply 19 of 31
    jd_in_sb said:
    What exactly is a fake iPhone? An android with a iPhone-like body and skin?
    Genuine iPhone: designed in California, assembled in China

    Fake iPhone: designed in California, assembled in China
    edited February 3 SoliJaiOh81
  • Reply 20 of 31
    MacProMacPro Posts: 17,456member
    wood1208 said:
    Not bad. Made over $1M, sent to family and live in better prison than Chinese labor camp if convicted in China..
    More profits than Samsung dealers too ;)
    watto_cobra
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