Chinese national gets five years for counterfeit battery scam

A federal judge has sentenced a Chinese national involved in a multimillion-dollar scheme to supply counterfeit laptop batteries and other electronics to US consumers has been sentenced to five years in prison.

Zoulin Cai (30)– also known as Allen Cai – of La Puente, Los Angeles County, had previously admitted one count of conspiracy to commit wire fraud and mail fraud and one count of aggravated identity theft as part of a plea agreement in connection with the case. He was also ordered to pay $9.2m in restitution and $25,000 in fines.

Cai as a member of a conspiracy that imported batteries, battery labels, cell phones, and other electronics and then then sold the bogus items to unsuspecting buyers via eBay and Amazon. The batteries bore counterfeit trademarks of companies such as Apple, Dell, HP and Toshiba.

Court documents have listed seven accomplices, six of whom are living in China and have not been indicted. A 2019 raid on warehouses operated by Cai unearthed approximately 44,000 batteries, as well as approximately 175,000 labels.

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The fraudsters packaged fake items and shipped them to the US, sometimes covering the trademarks with black tape or a similar material, so that a quick inspection by customs officials would not reveal the trademark infringement.

Sentencing Cai, US District Judge John F Walter said that manufacturers had made a loss of $9.5m as a result of Cai's activities.

"Counterfeit lithium-ion batteries have significant safety risks," prosecutors wrote in a sentencing memorandum filed with the court.

"The batteries…distributed by [Cai] frequently lacked internal safeguards, resulting in a significant risk of fire, explosion, and danger to human life and safety."