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11 San Diegans facing federal charges in $6 million fake Apple products scheme

Three people are still at-large, including one person from San Diego.
Credit: KFMB, photos provided by U.S. Attorney

SAN DIEGO —

The U.S. Attorney’s office says it’s charging fourteen people for the biggest fraud of its kind in San Diego.

A federal grand jury indicted 14 suspected members for their alleged international crimes. These 14 suspects are facing fraud, conspiracy, identity theft and money laundering charges related to an alleged multi-million-dollar counterfeit iPhone and iPad scheme. 

“According to the indictment, the organization - led by three brothers - imported more than 10,000 counterfeit iPhones and iPads from China, exchanged them for the real thing at Apple stores throughout the United States and Canada, and then shipped the authentic devices back to China and other foreign countries to sell at a premium,” said U.S. Attorney Robert S. Bewer Jr. of San Diego.

The crime was possible because Apple products are under warranty, so the suspects would exchange fake, damaged iPhones and iPads for real ones. 

FBI agents arrested the three Liao brothers Wednesday morning, Nov. 13, along with their respective wives. According to the U.S. Attorney’s office, the brothers are naturalized U.S. citizens born in China. Zhiwei, Zhimin and Zhiting Liao all live in San Diego and are in their early 30’s. 

The other people arrested from San Diego are listed as Dao Trieu La, Mengmeng Zhang, Tam Thi Minh Nguyen, Deedee Zhu, Danny Tran Chan, Jiaye Jiang and Dmitri Pigarov. 

Investigators executed 11 search warrants on Wednesday morning. This included two businesses, multiple homes and cars located in Mira Mesa and Mission Hills. According to the U.S. Attorney’s office, investigators say they seized an estimated $250,000 in cash and 90 iPhones. 

The U.S. Attorney’s office says Apple believes this a $6.1 million scheme. 

“While [this is] a significant amount of money in any circumstance, this prosecution is about more than monetary losses,” said Brewer. “The manufacture of counterfeit goods - and their use to defraud U.S. companies - seeks to fundamentally undermine the marketplace and harms innocent people.”  

Three of the 14 suspects are still at-large, one of whom is from San Diego. The U.S. Attorney's office says the three fugitives are Xiamon Zhong, who is believed to be in China, Charley Hsu of San Diego and Hyo Weon Yang of San Francisco.  

FBI Special Agent Scott Brunner says Wednesday’s arrests are part of the effort to stop “international fraud schemes that affect American citizens and American businesses against counterfeit goods originating in China and those fraudsters who exploit American trademarked products for their personal financial gain.” 

If a suspect is convicted of all of the charges on the indictment and given the maximum sentence for each, they’ll face up to 102 years in prison in total. 

The FBI, the San Diego Police Department, U.S. Customs and Border Protection, Homeland Security Investigations and San Diego County Sheriff’s Department are all investigating. 

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