California man gets two years for fake cell phone parts scam

A man has been sentenced today to 24 months in federal prison for conspiring to smuggle counterfeit Apple, Samsung, and Motorola cell phone components from China that were then sold to consumers in the US.

Chan Hung Le (46) of Laguna Hills, Orange County, has also been ordered him to pay a $250,000 fine in connection with the scheme, thought to have generated tens of millions of dollars in revenue.

Le pleaded guilty in November 2020 to one count of conspiracy to defraud the US, to intentionally traffic in counterfeit goods, and to illegally bring merchandise into the country. He was arrested in 2019.

From late 2011 to February 2015, Le conspired with other individuals to import from China cell phone parts and other electronic items bearing counterfeit marks, according to a Department of Justice statement.

Le attempted to conceal the scheme by using multiple business names and addresses, as well as "virtual offices" and post office boxes, in multiple US states. He used the name and identity documents of one of his employees to set up the virtual offices and directed other conspirators to ship trademarked goods under employees or relatives' names.

Once the counterfeit products arrived, Le and his co-conspirators distributed the parts to the public through various online stores. Substandard components used in phones can malfunction, with the potential to injure users and damage goods and property.

In 2016, one of Le's suppliers, Hongwei “Nick” Du, pleaded guilty to conspiring to traffic in counterfeit goods and related money laundering charges.

In his plea agreement, Du admitted to selling Le at least $18.7m worth of cellular telephone and electronic components for resale from China into the United States and that about half of the goods were counterfeit items bearing the trademarks of Apple, Samsung, Motorola, and other companies. Du was sentenced to three years in prison.

Le was at the centre of "an elaborate scheme to deceive customs agents by creating covert shipping channels from Hong Kong and China to different US states," prosecutors wrote in their sentencing memorandum.

"From this conduct, and this deception, [he] generated millions of dollars in profit. This was a sophisticated, long-standing, and highly profitable offense."