Two Chinese Citizens Plead Guilty To Trafficking Counterfeit Cell Phone Cases
Boston – Two Chinese citizens, living in Massachusetts, pleaded guilty today to importing and reselling counterfeit cases for cell phones.
Zexiong Chen, 28, and Haotian Chen, 26, who are unrelated, pleaded guilty before U.S. District Court Judge F. Dennis Saylor IV to trafficking in counterfeit goods. Sentencing is scheduled for Dec. 11, 2014.
In February 2013, the defendants incorporated Max Wireless Group, Inc. as a vehicle for importing and reselling cell phone cases, many of which were counterfeit. Through Max Wireless, Zexiong Chen and Haotian Chen imported counterfeit cell phone cases from China, sold a small percentage of them through their Wakefield store, and sold the vast majority of them to individuals and companies who resold them at retail locations. Many of these retail locations were kiosks in shopping malls, some of which were in Massachusetts.
On 12 occasions from November 2012 through August 2013, U.S. Customs and Border Patrol officials inspected shipments the defendants imported from China to the United States and determined that these shipments contained counterfeit items. These 12 seizures included more than 10,000 counterfeit cell phone cases, bearing marks of manufacturers, including OtterBox, Speck, Kate Spade, Hello Kitty, Ferrari and LifeProof. On Sept. 4, 20013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.
The total retail price for the authentic versions of all of the cell phone cases seized during the course of this investigation was more than $350,000, but the defendants paid far less for the cases and typically resold the cases for far less than suggested retail price.
In February 2014, Zexiong Chen was arrested at JFK International Airport as he prepared to board a plane to China. He has been in custody since that time. Haotian Chen, who was also arrested in February 2014, was released by the Court on conditions, and remains on release.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime Unit.