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Orange County man sentenced to prison for multimillion-dollar conspiracy to smuggle counterfeit cell phone parts from China following ICE HSI probe


By INTELLECTUAL PROPERTY RIGHTS AND COMMERCIAL FRAUD

Originally posted on
ICE
www.ice.gov

SANTA ANA, Calif. – An Orange County man was 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 United States, a scheme that generated tens of millions of dollars in revenue.

As the result of a probe by Homeland Security Investigations (HSI) Los Angeles, Chan Hung Le, 46, of Laguna Hills, was sentenced by U.S. District Judge Josephine L. Staton, who also ordered him to pay a $250,000 fine.

Le was arrested by HSI special agents in April 2019. He pleaded guilty in November 2020, to one count of conspiracy to defraud the United States, to intentionally traffic in counterfeit goods, and to illegally bring merchandise into the United States.

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. In furtherance of the conspiracy, Le set up and used mailboxes with virtual office service providers in Oklahoma and Texas using a fictitious business name, JV Trading Solutions. In furtherance of the conspiracy, Le also 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 Le’s employees’ or relatives’ names. Once the counterfeit products arrived, Le and his co-conspirators distributed the parts to the public through various online stores.

“[Le]…orchestrated an elaborate scheme to deceive customs agents by creating covert shipping channels from Hong Kong and China to different U.S. states,” prosecutors wrote in their sentencing memorandum. “From this conduct, and this deception, [Le] generated millions of dollars in profit. [Le] enlisted numerous other parties in his conduct – including his romantic partner, his employees (witting or unwitting), other family members, and the unwitting virtual mailbox service companies. This was a sophisticated, long-standing, and highly profitable offense.”

In 2016, one of Le’s suppliers, Hongwei “Nick” Du, pleaded guilty in U.S. District Court in San Diego to conspiring to traffic in counterfeit goods and related money laundering charges. In his plea agreement, Du admitted to selling Le at least $18,744,354 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 federal prison.

U.S. Customs and Border Protection and the Westminster Police Department provided investigational assistance in this case, which was prosecuted by the U.S. Attorney for the Central District of California’s Cyber and Intellectual Property Crimes Section.

HSI is a directorate of U.S. Immigration and Customs Enforcement (ICE) and the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 Special Agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.