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15 November 2019TrademarksRory O'Neill

US prosecutors charge 14 over counterfeit iPhone scam

US prosecutors have filed charges against 14 individuals accused of running a counterfeit iPhone and iPad scheme that allegedly cost Apple more than $6 million.

According to the US Department of Justice (DoJ), the organisation responsible for the scheme imported more than 10,000 counterfeit tablets and smartphones from China and exchanged them at Apple stories for legitimate products.

The group then sent the authentic devices to China to sell at a significant mark-up.

Apple “conservatively estimates” it suffered losses exceeding $6.1 million as a result of the scheme.

US attorney Robert Brewer said that while this marked a “significant amount of money in any circumstance, this prosecution is about more than monetary losses”.

“The manufacture of counterfeit goods—and their use to defraud U.S. companies—seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities,” he said.

The scheme was allegedly organised by three brothers, who were arrested by the Federal Bureau of Investigation (FBI) yesterday, November 13.

Prosecutors said the brothers intentionally damaged the counterfeit devices and induced others to exchange them for genuine Apple devices under the company’s warranty policy.

FBI special agent in charge Scott Brunner said the arrests showed the agency’s commitment to cracking down on “fraudsters who exploit American trademarked products for their personal financial gain”.

The arrests of the three brothers followed raids in which the FBI seized $250,000 in cash as well as 90 suspected counterfeit iPhones.

Prosecutors said the scheme marked the biggest fraud of its kind in the Southern District of California, where the charges were filed.

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20 December 2019   A US Department of State employee and his wife have been charged with conspiring to traffic counterfeit goods into the country.