ICE Seizes $2 Million in Counterfeit Cell Phones Shipped from China, Arrests Three
A counterfeit trafficking ring was dismantled, resulting in the seizure of more than 32,000 bogus cell phones and other electronics, Immigrations and Customs Enforcement said. Qiang Chen, 44, and Ye Zhang, 43, both of Syosset, N.Y, and conducting business as AMAX International Group Inc., and Robert Eisenberg, 28, of Manhattan conducting business as Cellular Wholesale USA Inc., were arrested in connection with the scheme, said ICE, which involved the bulk shipment of cell phones from China and subsequent repackaging and sale of the counterfeit phones online or through legitimate cell phone wholesalers who were likely unaware they were receiving counterfeit goods.
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Each defendant faces up to four years in prison if convicted. According to ICE, the charges could be upgraded to trademark counterfeiting in the first degree depending on the ultimate number of counterfeit items and their retail value.
Shipment of Loose Cell Phones Prompted Investigation
The investigation began in January 2012 when CBP officers at John F. Kennedy International Airport (JFK) performing a random inspection of a shipment of cellular phones from China grew suspicious that the phones were not authentic due to their appearance and because they were shipped loose in cardboard boxes with no packaging, ICE said. Special agents removed several phones from the shipment and sent them to the respective companies according to their labeling -- such as Motorola or HTC -- for testing.
According to ICE, analysis by the real manufacturers revealed that these phones were counterfeit, with numerous inconsistencies in the phones' designs, inferior technology and parts used in their construction.
Seizure of Over 32,000 Cell Phones, Including 40 Counterfeit iPads
The shipment was allowed to reach its intended recipient, but both the sender and recipient were flagged. Eight more pallets of counterfeit cell phones were sent via China Air to the same recipients between January and June 2012, ICE said.
ICE and local police officers tracked the phones from the airport to two warehouses in Plainview, N.Y., and Hicksville, N.Y.
Search warrants were executed June 20 at the warehouses, as well as on a shipment at JFK, resulting in the seizure of more than 32,000 cell phones with a retail value of more than $2 million, ICE said. Forty counterfeit Apple iPads and various accessories -- along with $539,710 in currency -- were also seized.