LOS ANGELES – A Chinese national who participated in a multimillion-dollar scheme to manufacture, ship and market counterfeit laptop computer batteries and other electronics made in China was sentenced today to 60 months in federal prison.
Zoulin “Allen” Cai, 30, of La Puente, was sentenced today by U.S. District Judge John F. Walter, who also ordered the defendant to pay $9,227,543 in restitution and a $25,000 fine.
As the result of an investigation by Homeland Security Investigations (HSI) Los Angeles with assistance from the brand-holding companies, Cai pleaded guilty on June 29 to one count of conspiracy to commit wire fraud and mail fraud and one count of aggravated identity theft.
Cai was a member of a conspiracy that imported batteries, labels for batteries in laptop computers, cellphones and other electronics from China to the United States. Cai then sold and shipped the counterfeit batteries to unsuspecting buyers via eBay and Amazon, falsely advertising them as brand name, genuine, original or OEM (original equipment manufacturer) products. Those batteries bore counterfeit trademarks of companies such as Apple, Dell, HP and Toshiba, as well as counterfeit certification marks of UL, a company that tests and certifies the safety of electronic products.
“Counterfeit lithium-ion batteries have significant safety risks,” prosecutors wrote in a sentencing memorandum filed with the court. “The batteries…distributed by [Cai] frequently lacked internal safeguards, resulting in a significant risk of fire, explosion, and danger to human life and safety.”
Co-conspirators in China packaged counterfeit batteries and electronics and shipped them to the United States, sometimes covering the trademarks with black tape or a similar material, so that a quick inspection of the items by customs officials would not reveal the trademark. The counterfeit batteries were imported, sold, and shipped from Cai-controlled warehouses in La Puente.
When HSI special agents executed a search warrant at Cai’s warehouse In December 2019, they discovered approximately 44,000 batteries, as well as approximately 175,000 labels bearing the counterfeit marks of multiple companies.
Judge Walter found that the loss resulting from Cai’s conduct was more than $9.5 million.
This case was prosecuted by the U.S. Attorney for the Central District of California’s Cyber and Intellectual Property Crimes and General Crimes Sections.
HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move.
HSI’s workforce of over 10,400 employees consists of more than 7,100 Special Agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.