FBI busts Chinese ring importing fake iPhones, iPads worth Ksh.600M

The Federal Bureau of Investigation has revealed a counterfeit ring involved in shipping fake iPhones and iPads across the world.

The investigation that reportedly took years is said to have hit across many jurisdictions.

14 people are facing dozen counts of fraud, conspiracy, identity theft and money laundering charges.

According to US Attorney Robert Brewer, the fake devices are estimated to have cost Apple over $6.1 million (Ksh. 622,774,010).

He said the counterfeit ring saw over 10,000 devices imported from China to the US, and then to other countries around the world.

The importers would are said to have intentionally damaged the shipped counterfeit devices and then gone to Apple stores for replacement since the company insures its products with a warranty.

The fake devices would then be exchanged with genuine products.

They would do this after equipping the phones and iPads with IMEI and serial numbers that matched those of real devices under warranty.

IMEI is a code that uniquely identifies mobile phone sets.

CNN reports that the genuine products would then be shipped to China and other countries and sold at a marked up price.

During the years-long investigation, FBI traced the original devices using their International Mobile Equipment Identity (IMEI) and serial numbers that matched the counterfeit products they were exchanged with.

According to American law, using other people’s IMEI or serial numbers is a form of aggravated identity theft.

Transferring, possessing and using someone else’s IMEI as a means of identification without lawful authority is a crime in the U.S.

“The manufacture of counterfeit goods  and their use to defraud US companies  seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities,” Brewer told CNN.

CNN also reported that among the suspects arrested include three brothers and their wives who are naturalized U.S. citizens born in China.

According to a Press release from the US Attorney’s Office, others linked to the scam are U.S. citizens also naturalized but from Vietnam and Russia.