A Laguna Hills man has been arrested in a multimillion dollar scheme to smuggle counterfeit cellphone parts from China into the U.S., federal officials announced Wednesday.
Chan Hung Le, 44, allegedly conspired to bring into the country knockoff screens and other parts used in devices made by Apple, Samsung, Nokia and other companies starting in 2010. He worked with his relatives and employees at EZ Elektronix, an Irvine-base company he owns with his wife, according to the U.S. Attorney’s Office for the Central District of California.
Le is accused of hiding the operation by using multiple business names, address, “virtual offices” and post office boxes. When the merchandise arrived in the U.S., Le and his co-conspirators sold them through retails websites that claimed the parts were genuine, the U.S. Attorney’s Office said.
Officials searched EZ Elektronix’s office in 2011 and 2012 and reported seizing about 7,200 counterfeit iPhone parts in addition to 11,700 other fake cellphone components with a total estimated retail value of at least $1.7 million, according to an affidavit. Le subsequently set up mail drops in Texas and Oklahoma using two fake companies and had the shipment sent to Southern California under a new business name, “Pac-Depot Inc.”
In 2016, one of his suppliers pleaded guilty in San Diego for conspiracy to traffic in counterfeit goods and money laundering charges. That person, Hongwei Du, admitted in a plea deal that he sold Le nearly $19 million worth of cellphone and electronic components for resale from China, officials said. Half of those knockoffs bore the trademarks of companies including Apple and Samsung.
EZ Elektronix allegedly paid more than $72 million to three companies that helped it traffic products from Hong Kong and China into the U.S. between January 2012 and December 2018.
Officials arrested Le on Tuesday afternoon on charges of conspiracy to defraud the U.S., conspiracy to traffic in counterfeit goods, conspiracy to illegally import merchandise, conspiracy to commit mail fraud and wire fraud, and aggravated identity theft, according to the U.S. Attorney’s Office.
He could face up to 45 years in federal prison for the conspiracy charges and a mandatory two-year sentence for the identity theft charge, officials said. He’s scheduled appear in court in Santa Ana on Wednesday afternoon.