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Three brothers from San Diego pleaded guilty in federal court, admitting that for eight years, they led an international conspiracy to traffic counterfeit iPhones and iPads.
As part of their plea agreements, the Liao brothers – Zhiwei, Zhimin and Zhiting – and their wives – Dao La, Mengmeng Zhang, and Tam Nguyen, who also pleaded guilty yesterday – agreed to forfeit their interests in five residences in San Diego, more than $250,000 in criminal proceeds, and more than 200 Apple iPhones that were counterfeit, fraudulently obtained, or linked to their criminal conspiracy.
The Liaos admitted that, from 2011 through at least August 2019, they managed an organization to traffic in counterfeit Apple products. The Liaos imported counterfeit iPhones and iPads from China that looked genuine and included identification numbers that matched identification numbers on real iPhones and iPads that were under warranty and had been previously sold to customers in the United States and Canada.
At the direction of the Liao brothers, co-conspirators traveled to hundreds of Apple Stores across the United States and Canada and attempted to exchange more than 10,000 counterfeit iPhones and iPads for genuine iPhones and iPads. The Liaos exported fraudulently obtained iPhones and iPads to individuals in foreign countries for profit. The estimated total infringement amount or loss suffered by Apple was approximately $6.1 million.
“As our markets become more global, more complex and more sophisticated, protecting intellectual property rights become even more important,” said U.S. Attorney Randy S. Grossman. “Our office will aggressively prosecute criminals who try to steal intellectual property and attempt to exchange counterfeit products for genuine products. We will continue fighting IP crime and upholding the rule of law.” Grossman thanked the prosecution team and the FBI for their excellent work on this case.
“For years, the Liao brothers and their co-conspirators trafficked thousands of counterfeit Apple products in exchange for genuine Apple products totaling millions of dollars,” said FBI Special Agent in Charge Stacey Moy. “The FBI and our law enforcement partners at the San Diego Police Department, the San Diego County Sheriff’s Department, U.S. Customs and Border Protection, Homeland Security Investigations, and the U.S Attorney’s Office will pursue criminal organizations who target legitimate businesses through fraudulent means for their own financial gain.”
The Liao brothers and their wives are scheduled to appear for sentencing before U.S. District Judge Cynthia A. Bashant on August 15, 2022, at 9:00 a.m.
DEFENDANTS Case Number 19CR4407-BAS
Zhiwei Liao, aka “Allen” San Diego, CA Age: 34
Zhimin Liao, aka “Jimmy” San Diego, CA Age: 36
Zhiting Liao, aka “Tim” San Diego, CA Age: 33
Dao Trieu La, aka “Selena”
aka “Denise” San Diego, CA Age: 32
Mengmeng Zhang, aka “Aria” San Diego, CA Age: 31
Tam Thi Minh Nguyen, aka “Kelly,”
aka “Actheart” San Diego, CA Age: 39
CO-CONSPIRATORS WHO PREVIOUSLY PLEADED GUILTY
Charley Hsu San Diego, CA Age: 41
Danny Tran Chan,
aka “Stanley” San Diego, CA Age: 32
Phillip Pak, aka “Teddy” San Diego, CA Age: 33
Deedee Zhu, aka “David,”
aka “Peter” San Diego, CA Age: 35
Jiaye Jiang, aka “joejoekong”
aka “yipkong” San Diego, CA Age: 34
Hyo Yang, aka “Will” San Diego, CA Age: 33
SUMMARY OF CHARGES
The Liao brothers (Zhiwei, Zhimin, and Zhiting) all pleaded guilty to conspiracy to traffic in counterfeit goods. The Liaos’ wives pleaded guilty to substantive counts of wire fraud or mail fraud. Dao Trieu La pleaded guilty to wire fraud. Mengmeng Zhang and Tam Nguyen pleaded guilty to mail fraud.
Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Section 2320
Maximum penalty: Ten years in prison, $2 million fine, mandatory restitution, and forfeiture.
Wire fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison, the greater of $250,000, or twice the value of the gross gain or twice the gross loss to the victims, mandatory restitution, and forfeiture.
Mail fraud – Title 18, U.S.C., Section 1341
Maximum penalty: Twenty years in prison, the greater of $250,000, or twice the value of the gross gain or twice the gross loss to the victims, mandatory restitution, and forfeiture.
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
San Diego Sheriffs
U.S. Customs & Border Protection
Homeland Security Investigations
