Quan Jiang, 30, a Chinese national and former engineering student at Linn Benton Community College in Albany, Oregon, pleaded guilty today to one count of trafficking in counterfeit goods, specifically fake and altered Apple iPhones. Jiang would import the counterfeit devices from Hong Kong and submit them to Apple in exchange for genuine warranty replacement phones to be sold on the Chinese market.
“Counterfeiting undermines commerce and inevitably leads to increased prices for goods enjoyed by millions of consumers,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “The investigators who worked this case and others like it provide an invaluable public service to American companies, entrepreneurs, and consumers alike in preserving a competitive market free of criminal interference.”
“Individuals who deal in counterfeit goods would have you believe that these are victimless crimes,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations (HSI) Seattle. “Do not be fooled, they’re not. Not only do they hurt the economy and legitimate businesses, but they also impact consumers directly. HSI and our law enforcement partners will continue to fight counterfeiting across all industries.”
According to court documents, between January 1, 2016, and February 1, 2018, Jiang would regularly receive packages containing between 20 and 30 counterfeit iPhones from associates in Hong Kong. Using various assumed names, Jiang would submit each iPhone to Apple individually in person or online for a warranty replacement; he would then ship the genuine replacement devices he received back to China for resale. In exchange for his service, Jiang’s associate would pay Jiang’s mother, also residing in China, who would in turn deposit the money into Jiang’s bank account.
Jiang later admitted to investigators that he knew the devices were counterfeit and that it was illegal to submit them to Apple as genuine products still under warranty. In just over two years, Jiang imported more than 2,000 inoperable counterfeit iPhones. He ultimately obtained approximately 1,500 genuine replacement iPhones, each with an approximate resale value of $600.
Jiang faces a maximum sentence of ten years in prison, a $2,000,000 fine or twice his proceeds, whichever is greater, and three years of supervised release. He will be sentenced on August 28, 2019 before U.S. District Court Judge Anna J. Brown.
As part of the plea agreement, Jiang has agreed to pay $200,000 in restitution to Apple.
This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) and prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.