Two Chinese Citizens Charged With Trafficking Counterfeit Cell Phone Cases

Boston – Two Chinese citizens, living in Massachusetts, were charged today with importing and reselling counterfeit cases for cell phones.

Zexiong Chen, 28, and Haotian Chen, 26, who are unrelated, were charged today with trafficking in counterfeit goods. It is alleged that in February 2013, the defendants incorporated Max Wireless Group, Inc. as a vehicle for importing and reselling cell phone cases, many of which were counterfeit. Through Max Wireless, Zexiong Chen and Haotian Chen allegedly imported counterfeit cell phone cases from China, sold a small percentage of them through their Wakefield store, and sold the vast majority of them to individuals and companies who resold them at retail locations. Many of these retail locations were kiosks in shopping malls, some of which were in Massachusetts.

In February 2014 Zexiong Chen was arrested at JFK International Airport as he prepared to board a plane to China. He has been in custody since that time. Haotian Chen was also arrested in February 2014 and was released by the Court on conditions.

It is alleged that on 12 occasions from November 2012 through August 2013, U.S. Customs and Border Patrol officials inspected shipments the defendants imported from China to the United States and determined that these shipments contained counterfeit items. These 12 seizures included more than 10,000 counterfeit cell phone cases, bearing marks of manufacturers including: OtterBox, Speck, Kate Spade, Hello Kitty, Ferrari and LifeProof. On Sept. 4, 2013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.

The total of the manufacturers’ suggested retail price (MSRP) for the authentic versions of all of the cell phone cases that were seized during the course of this investigation totaled more than $350,000, but the defendants paid far less for the cases and typically resold the cases for far less than MSRP.
The maximum sentence under the statute is 10 years in prison, followed by three years of supervised release and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. The case was investigated by Homeland Security Investigations and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime’s Unit.