Three days ago I shared a February 2nd U.S. Department of Justice (DOJ) press release on my blog’s daily “IP Theft/Infringement” news feed titled, “Chinese National Pleads Guilty to Conspiracy and Trafficking of Counterfeit Apple Goods Into the United States.”
This case presents a useful profile of these counterfeiters, as well as their modus operandi.
Here are a few hi-lights:
- Counterfeit operation active from July 2009 through February 2014
- Chinese national (43 years of age in the U.S. on a Student Visa)
- Chinese national’s company located in Hong Kong with manufacturing facilities in China
- 3-Conspirators (common Italian first and last names) located in Florida and New Jersey, respectively
- 40,000 iPads and iPhones smuggled into the U.S.
- Labels and packaging bearing counterfeit Apple trademarks
- Chinese national shipped devices separately from labels bearing counterfeit trademarks for later assembly by conspirators on U.S. soil to avoid detection of U.S. Customs
- Devices then shipped to conspirators all over the U.S. (New Jersey, New York, Massachusetts, North Carolina, Pennsylvania, California, Oklahoma, Louisiana, and other states)
- Counterfeits sold to unsuspecting customers who believed they were purchasing genuine Apple products
- Sale proceeds funneled back to conspirators in Florida and New Jersey
- Chinese national received payments totaling $1.1 million from U.S. accounts into his bank accounts via structured cash deposits (less than $10,000. per deposit)
- A portion of proceeds transferred to conspirators in Italy
- Estimated manufacturer’s retail price for the equivalent number of genuine items: $15,000,000.
- One of the three conspirators has been sentenced to 37 months in prison (the others are awaiting sentencing)
It is worth noting the Chinese national’s extra effort (as well as his conspirators) to avoid U.S. law enforcement detection, as well as the Chinese national’s age and student visa status.
This successful outcome was the result of a joint investigation that included DOJ, Homeland Security Investigations, Bergen County Prosecutor’s Financial Crimes Unit, Europol, and Italy’s Guardia di Finanza.
*Additional details noted above were extracted from the initial indictment on record with Public Access to Court Electronic Records (PACER.)