Apple UTC in San Deigo, whose local police worked on an international case
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The head of an international gang involved in a scam involving the return of 10,000 counterfeit iPhones and iPads has been sentenced to 51 months in prison.
About 14 people were involved in an international organization that ultimately stole at least $6 million from Apple. Two key figures, brothers Zhimin and Zhiting Liao (also known as “Jimmy” and “Tim”), were sentenced in October 2023 to 41 months in prison.
Now, according to Justice.gov, another brother, Zhiwei Liao (aka “Allen”), has been sentenced to 51 months as the organizer and leader of the international conspiracy. In addition to the four years and three months in prison, U.S. District Judge Cynthia Ann Bashant ordered Liao to surrender more than 200 Apple devices, more than $120,000 and forfeit two of her residences.
“This was a massive and sophisticated fraud that not only targeted Apple, Inc., but thousands of Apple product owners across North America,” U.S. Attorney Tara McGrath said in a statement. “The theft of intellectual property and the sale of counterfeit products are creating global problems with serious economic consequences.”
The operation was carried out by gang members in China who purchased counterfeit iPhones and iPads. Not only were these counterfeits visually convincing, but they also bore the serial numbers of genuine Apple devices purchased in the US and still under warranty.
It is unclear how these serial numbers were obtained, but having them on the devices, the brothers and associates “returned” these counterfeit iPhones and iPads to Apple. The devices will undergo an initial inspection by at least non-technical sales personnel, and Apple will replace them with genuine iPhones and iPads.
The gang then shipped these genuine devices to China, where they were sold.
In total, the gang reportedly stole more than 10,000 devices during visits to hundreds of Apple Stores. The gang was caught in 2019, by which time the operation had already lasted eight years and cost Apple approximately $6.1 million.
At the time of the initial arrest in 2019, three members of the group were fugitives from justice. They were subsequently detained, although it is unclear when.
“Mr. Liao's sentencing concludes an important chapter in a multi-year investigation,” said FBI San Diego Special Agent in Charge Stacy Moy, “which uncovered an international, sophisticated scheme to sell counterfeit products around the world.”
In total, the years-long investigation by the FBI and the San Diego Police Department resulted in 12 convictions. It included the seizure of $4.1 million in local homes, as well as more than $250,000 in cash.
Additionally, in 2023, federal authorities said they had seized nearly $400,000 worth of counterfeit Apple devices – — for one week at the Long Beach Seaport and Ontario International Airport.
