Nixa Woman Sentenced for $90 Million Fraud Scheme to Sell Counterfeit Cell Phone Parts
Operated Web Sites, Springfield Store That Sold Counterfeits from China
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Nixa, Mo., woman was sentenced in federal court today for selling more than $90 million worth of counterfeit cell phone components to hundreds of thousands of consumers over the Internet and at a Springfield, Mo., store.
Sherrie Householder, 59, of Nixa, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole. The court also ordered Householder to pay $8,866,069 in restitution.
On May 26, 2016, Householder pleaded guilty to one count of mail fraud and one count of money laundering.
Householder managed and operated Flash Technology, LLC, also known as Flash Tech, a business that sold cell phone components (such as replacement screens, lithium batteries, weight scales, phone cases and internal circuitry) through numerous Internet retail sites and at a Springfield store. Flash Tech sold hundreds of thousands, and potentially millions of different cell phone parts shipped to consumers throughout the United States. According to court documents, more than $90 million in sales were made to hundreds of thousands of consumers from December 2012 to January 2016.
Householder represented that the cell phone components were manufactured by legitimate companies – including Apple, Samsung, LG, Microsoft, Android, Dell, Blackberry, ASUS, Acer, Kindle, HTC, Motorola, Nokia, Sony, ZTE and others. Although each part contained trademarks and markings that made it appear the legitimate holder of the trademark had manufactured the parts, and although Householder used the trademarks and logos of these companies on her Web sites, the components were actually counterfeit.
Wang “Frank” Luo, a Chinese citizen, owned Flash Tech, while Householder managed the company’s activities in the United States. Lou shipped the cell phone component parts to Householder. Nearly 5,000 international shipments were sent to Flash Tech from China.
According to court documents, Householder’s knowledge that a fraud was being perpetrated occurred during the last six months before law enforcement shut the operation down, when she began receiving seizure letters from Customs and Border Protection. Between August and December 2015, over a dozen shipments from Luo’s factory in China to Householder in Springfield were intercepted and inspected by CBP agents. After seizing each shipment, CBP issued a letter of notification informing Householder of the seizure due to confiscated counterfeit items. Even though she was informed that the items she received from Luo were counterfeit, she continued selling these counterfeit products. Between August 2015 and the execution of federal search warrants on Feb. 2, 2016, Householder sold approximately $8,860,000, in counterfeit cell phones and component parts.
When federal agents executed search warrants at Householder’s residence and Flash Tech’s business address, they seized over 100,000 cell phone and component parts. The counterfeit items seized by agents had a retail value of approximately $5.5 million and filled two large moving trucks.
Householder must forfeit to the government $556,938 seized from various PayPal, Amazon and bank accounts; numerous desktop and laptop computers, iPads, hard drives, computer and cell phone components; and a money judgment of $8,866,069.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by Homeland Security Investigations and IRS-Criminal Investigation.