Criminal Arrests & Sentencings
Tao Li
On October 16, 2019, Tao Li, aka Michael Wilson aka Richard Lee, a Chinese citizen, was sentenced to 40 months’ imprisonment followed by three years of supervised release. Li had pleaded guilty in April to conspiring to export military and space grade technology to China without a license in violation of the International Emergency Economic Powers Act.
Li was arrested in September of 2018 in Los Angeles International Airport after arriving from China. Li and other individuals in China had been attempting to purchase radiation hardened power amplifiers and supervisory circuits. Using different aliases, Li contacted various individuals in the US attempting to purchase the restricted components, including Intersil part numbers ISO705ARHVF and HS1-201HSRH-Q, TriQuint part number TGA2573-2, and Cobham part number UT28F256QLET. Li additionally offered to pay a 10% “risk fee” to have the components illegally exported to his company in Hong Kong. After wiring money from China to a secret undercover government bank account in Arizona, Li was arrested in transit to Arizona to meet with an undercover Homeland Security Investigations agent.
According to the Federal Bureau of Prisons, Li is currently incarcerated at CI Reeves I & II in Texas with an anticipated release date of August 1, 2021.
Additional information: https://www.justice.gov/opa/pr/chinese- national- sentenced- 40- months- prison- conspiring- illegally- export- military- and- space
Saad Ahmed
On December 9, 2019, Saad Ahmed was sentenced to six months’ imprisonment for conspiracy to traffic in counterfeit goods. Ahmed, owner of PhonePartsUSA.com LLC, had pleaded guilty in September in a Southern District of California federal court.
Ahmed admitted to trafficking approximately $1.5 million of counterfeit cellular phone parts that bore fraudulent Samsung, Apple and UL trademarks. The vast majority of parts were purchased from overseas suppliers based principally in China. To avoid detection by CBP, the shipments containing counterfeit materials were separated from other shipments, counterfeit trademarks were obscured by protective stickers, and addresses and names to which counterfeit product was sent were manipulated in order to deflect detection.
Ahmed agreed to pay $269,681 in restitution to the trademark holders and forfeit 4,453 cell phone parts and accessories seized in June 2018 by Homeland Security Investigations. According to the Federal Bureau of Prisons, Ahmed is not currently in custody.
Additional information: https://www.justice.gov/usao-sdca/pr/las- vegas- businessman- sentenced- prison- trafficking- more- 1- million- counterfeit
Zoulin Cai
On December 19, 2019, Zoulin Cai, aka Allen Cai, a Chinese citizen, was arrested pursuant to a federal grand jury three-count indictment for conspiracy to traffic in counterfeit goods and labels, conspiracy to commit wire fraud and mail fraud, and conspiracy to engage in money laundering.
According to the complaint, Cai was employed by Shenzhen Theseus Technology, aka Theseus Technology aka Everlasting Energy, a Chinese company allegedly owned by Cai’s relatives. The government contends that Theseus Technology manufactured counterfeit batteries, including laptop batteries, which were then exported to the United States to warehouses under Cai’s control and subsequently sold through online portals such as eBay and Amazon. The counterfeit batteries were falsely advertised as genuine product when in reality they bore counterfeit trademarks from Dell, Apple, HP, Toshiba and UL. According to Assistant US Attorney Tracy L. Wilkison, “the batteries involved in this case were sold to numerous unsuspecting online buyers, including one victim whose laptop started smoking and nearly caught fire after the battery was installed.” Cai and his co-conspirators received at least $23.8 million from the sale of counterfeit batteries from 2014 through June of 2019 and allegedly laundered more than $18 million directly to Chinese bank accounts in the name of Theseus Technology.
If convicted, Cai faces a maximum sentence of 50 years’ imprisonment.
Additional information: https://www.justice.gov/usao-cdca/pr/chinese- national- arrested- 238- million- scheme- sell- counterfeit- laptop- computer- batteries
Q: WHO CAN REPORT PARTS TO ERAI?
A: ANYONE. Membership to ERAI is not required.
We have made the process as simple as possible by offering two ways to report parts:
1. Report a part online at: http://www.erai.com/SubmitHighRiskPart
2. Or even simpler, email your report to reportparts@erai.com
We require: 1) the part information, manufacturer, part number, date code, lot code; 2) a text description of the non-conformance or findings and; 3) digital images that support the findings.
Ideally, you can send all archived data you have and make reporting future cases routine by including a report to ERAI in your existing inspection process.
Please note that you can report parts anonymously. We will not include your company name on an alert. You do not have to report the supplier that shipped you counterfeit devices unless you choose to. The major benefit to the industry at large is knowing there is a suspect counterfeit part out there.