Fourteen Indicted in $6M Counterfeit iPhones Scheme; Biggest Fraud of its Kind in Southern District
SAN DIEGO – A federal grand jury indictment was unsealed today charging fourteen alleged members of an international criminal organization with dozens of fraud, conspiracy, identity theft and money laundering charges related to their multi-million-dollar counterfeit iPhone and iPad scheme.
During a coordinated takedown that began early this morning, investigators executed 11 search warrants - including at two businesses plus several homes and vehicles located in Mira Mesa and Mission Hills - and seized an estimated $250,000 in cash plus 90 iPhones which are being evaluated to determine authenticity. As of today at noon, 11 of 14 defendants are in federal custody. Three are fugitives, including Xiamon Zhong, who is believed to be in China; Charley Hsu of San Diego; and Hyo Weon Yang of San Francisco.
According to the indictment, the organization - led by three brothers - imported more than 10,000 counterfeit iPhones and iPads from China, exchanged them for the real thing at Apple stores throughout the United States and Canada, and then shipped the authentic devices back to China and other foreign countries to sell at a premium.
Apple conservatively estimates that the loss associated with the counterfeit items that were fraudulently exchanged at Apple Stores for genuine Apple productss exceeds $6.1 million.
Read more: https://www.justice.gov/usao-sdca/pr/fourteen-indicted-6-million-counterfeit-iphones-scheme-biggest-fraud-its-kind-southern