O.C. Man Arrested on Federal Charges Stemming from $72 Million Scheme to Smuggle Counterfeit Cell Ph

[nitpicker]

https://www.justice.gov/usao-cdca/pr/oc-man-arrested-federal-charges-stemming-72-million-scheme-smuggle-counterfeit-cell

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Wednesday, April 17, 2019

O.C. Man Arrested on Federal Charges Stemming from $72 Million Scheme to Smuggle Counterfeit Cell Phone Parts from China

SANTA ANA, California – A Laguna Hills man has been arrested on federal charges alleging he oversaw a scheme that smuggled counterfeit Apple and Samsung cell phone components from China that were sold in the United States, generating tens of millions of dollars in revenue.

Chan Hung Le, 44, was arrested Tuesday afternoon pursuant to a criminal complaint that charges him with conspiracy to defraud the United States, conspiracy to traffic in counterfeit goods, conspiracy to illegally import merchandise, conspiracy to commit mail fraud and wire fraud, and aggravated identity theft. Le is expected to make his initial court appearance this afternoon in United States District Court in Santa Ana.

According to the affidavit in support of the complaint, Le and his wife own EZ Elektronix, a company now based in Irvine that imported counterfeit electronics products – screens and other cell phone parts – from China into the United States. Starting in June 2010, Le and several co-conspirators, including his relatives and employees, smuggled counterfeit goods and employed various tactics to avoid scrutiny from authorities in the United States, Hong Kong and China, the affidavit states.

The complaint alleges that Le attempted to conceal the scheme by using multiple business names and addresses, as well as “virtual offices” and post office boxes, in at least three U.S. states. Once the counterfeit products arrived, Le and his co-conspirators allegedly distributed the parts to the public through various online stores that falsely claimed the parts were genuine.

In October 2011 and February 2012, law enforcement executed search warrants at EZ Elektronix’s office and seized approximately 7,200 counterfeit iPhone parts and 11,700 other counterfeit cell phone parts that had a retail value of more than $1.7 million, the affidavit states. In response to the search warrants, Le allegedly changed his importation practices by having the counterfeit goods sent to mail drops he set up in Texas and Oklahoma under the names of two fictitious companies and one of his employees. After the bogus parts were sent to the mail drops, they were shipped to Southern California under a new business name, “Pac-Depot Inc.,” while legitimate merchandise was shipped directly to EZ Elektronix, the affidavit states. Using these methods, Le ensured that the shipments containing counterfeit goods would be inspected at a different port of entry in the United States and would not be associated with him or his company, court papers state.

In 2016, one of Le’s suppliers, Hongwei “Nick” Du, pleaded guilty in United States District Court in San Diego to conspiring to traffic in counterfeit goods and related money laundering charges. In his plea agreement, Du admitted to selling Le at least $18,744,354 worth of cellular telephone and electronic components for resale from China into the United States and that about half of the goods was counterfeit merchandise bearing the trademarks of Apple, Samsung, Nokia and other companies.

Between January 2012 and December 2018, EZ Elektronix paid more than $72 million to three companies who conspired with Le to traffic counterfeit goods from Hong Kong and China into the United States, according to the affidavit.
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