Chan Hung Le, 44, is accused of federal conspiracy charges related to defrauding the United States, illegally importing merchandise and trafficking in counterfeit goods, among other charges, the U.S. Attorney’s Office said on Wednesday.
Federal prosecutors accuse Le, who along with his wife owns Irvine-based EZ Elektronix, of working since June 2010 with other co-conspirators, including relatives and employees, to smuggle screens and other cellphone parts from China.
To avoid scrutiny from authorities in the United States, Hong Kong and China, authorities allege Le used multiple business names and addresses, “virtual offices” and post office boxes in at least three states. Prosecutors said that once the products arrived in the country, Le and the suspected co-conspirators distributed them through online stores, claiming the counterfeit parts were genuine.
In 2011 and 2012, law enforcement agents carried out search warrants at the EZ Elektronix office, seizing around 7,200 counterfeit iPhone parts and 11,700 counterfeit parts from other cellphones, according to the U.S. Attorney’s Office. The seized cellphone parts had an estimated retail value of more than $1.7 million, according to prosecutors.
After the seizures, prosecutors allege Le began to have counterfeit parts sent to mail drops he is suspected of setting up in Texas and Oklahoma under the name of two fake companies. The counterfeit parts were then sent to California under a new business name, according to the U.S. Attorney’s Office, while legitimate merchandise was sent directly to EZ Electronic.
Prosecutors said that using the new shipping methods and fake companies, Le made sure the counterfeit goods would be inspected at different ports of entry than the legitimate merchandise, and wouldn’t be associated to him or his company.
In 2016, Hongwei “Nick” Du, identified by prosecutors as one of Le’s suppliers, pleaded guilty in federal court in San Diego to counterfeiting goods and money laundering. As part of a plea agreement, Du admitted to selling Le at least $18 million in counterfeit electronics, according to the U.S. Attorneys Office.
According to a sworn statement from a federal investigator, EZ Elektronix, between January 2012 and December 2018, paid $72 million in the scheme to three companies suspected of conspiring with Le to traffic counterfeit goods into the country.
