SAN DIEGO – A California man identified as an organizer and leader of an international conspiracy to traffic counterfeit Apple products has been sentenced to more than four years in federal prison. Zhiwei “Allen” Liao was also ordered to forfeit two residences along with $120,370 in U.S. currency and more than 200 Apple devices seized during the investigation.
The case was part of a multi-year investigation led primarily by the FBI and conducted jointly with Homeland Security Investigations (HSI), the San Diego Police Department, San Diego County Sheriff’s Department, Customs and Border Protection (CBP), and members of the U.S. Marshals Service. The investigation resulted in 12 felony convictions, the forfeiture of five residences in San Diego with an estimated value of more than $4.1 million, over $250,000 in cash, and more than 200 Apple products that were either counterfeit, fraudulently obtained, or used during the criminal operations.

In a news release issued by the U.S. Attorney’s Office for the Southern District of California, and according to court documents, Zhiwei Liao and his brothers, Zhimin Liao and Zhiting Liao led an international exchange fraud scheme involving more than 10,000 counterfeit iPhones and iPads. The Liaos imported counterfeit iPhones and iPads from China that looked genuine and included identification numbers (IMEI and serial numbers) matching identification numbers on real iPhones and iPads that were under warranty and had been previously sold to customers in the United States and Canada.

At the direction of the Liao brothers, co-conspirators traveled to hundreds of Apple Stores across the United States and Canada and attempted to exchange counterfeit iPhones and iPads for genuine iPhones and iPads resulting in a loss of $6.1 million to Apple, Inc. Zhiwei Liao then sent the fraudulently obtained, but genuine Apple products primarily to China where they were sold at a premium.

U.S. District Judge Cynthia Ann Bashant said that a significant prison sentence was appropriate because Zhiwei Liao was the organizer and leader of an extensive international criminal organization that trafficked in counterfeit goods throughout North America for several years.

The scheme was sophisticated and dynamic, involving counterfeit devices imported from China that looked like genuine devices under warranty. Zhiwei Liao micromanaged the operations and created a moving target for law enforcement by directing counterfeit Apple products and criminal proceeds to be sent to different co-conspirators, companies, and family members throughout the scheme. Co-conspirators supported these efforts to avoid law enforcement by exchanging the counterfeit products using a variety of false names and email accounts.

The defendant’s brothers, Zhimin Liao and Zhiting Liao, who were also leaders of the conspiracy, were previously sentenced to 41 months in custody in October 2023.

“Mr. Liao’s sentencing closes a major chapter in a multi-year investigation that exposed an international, elaborate scheme to sell counterfeit goods worldwide,” said FBI San Diego Special Agent in Charge Stacey Moy. “This investigation would not have been successful without the unwavering dedication and persistence of our law enforcement partners. We remain diligent in the pursuit of justice to help maintain the integrity of our economy.”