A pair of Chinese nationals have been sentenced for committing a variety of crimes while defrauding Apple Inc. of millions of dollars, federal authorities have informed Border Hawk.
Homeland Security Investigations (HSI) worked alongside IRS Criminal Investigation, the United States Postal Inspection Service, and the Los Angeles Police Department to dismantle a large-scale, trans-Pacific fraud ring based in the Inland Empire of California.
Wenhui Huang, 41, has been identified as the ringleader of the operation.
Huang, who is in the U.S. illegally, pleaded guilty to conspiracy to commit wire fraud and mail fraud, conspiracy to traffic in counterfeit goods, and engaging in a monetary transaction in property derived from specified unlawful activity.
On Aug. 28, he was sentenced to 78 months in federal prison and ordered to pay $16,239,254 in restitution.
Yang Song, 39, has been identified as the group’s second-in-command.
Song pleaded guilty to 21 counts of conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and conspiracy to traffic in counterfeit goods, as well as one count of conspiracy to commit money laundering for a separate scheme involving the funneling of proceeds of various frauds to overseas entities.
He was sentenced to 57 months in federal prison and ordered to pay $16,997,415 in restitution.
Between December 2015 and March 2024, Huang and Song colluded with overseas co-conspirators and at least four other defendants — all of whom have now been sentenced — to smuggle counterfeit Apple devices into the U.S., according to the Department of Justice.
The phony products included identification numbers matching the numbers on real Apple products that had been sold in North America, were owned by real people, and were under warranty through Apple.
In many cases, the fraudsters successfully returned the counterfeits to Apple, claiming they were defective or non-operational.
When Apple replaced the forgeries with authentic devices, the defendants sent them to co-conspirators in the U.S. and China, who then sold them at substantial profit.
“HSI’s mandate is to protect the integrity of the U.S. marketplace by investigating the illegal movement of goods, technology, and funds across our borders,” said HSI Los Angeles acting Special Agent in Charge Erin Burke.
“This investigation highlights our commitment to identifying and dismantling sophisticated, international fraud networks. These defendants weaponized counterfeit goods to defraud an American company of millions, but today’s sentencing proves that these global criminal schemes will be met with a rigorous federal response.”
