Two Syosset men face up to four years in prison after police uncovered a multimillion dollar counterfeit cell phone scam, according to Nassau County 's office. A police search Tuesday at JFK International Airport and warehouses where the phones were sent yielded over 32,000 phones worth over $2 million on store shelves.
According to the DA's office, Qiang Chen, 44, and Ye Zhang, 43, both of Syosset, while doing business as AMAX International Group, Inc. in Plainview, allegedly brought in counterfeit cell phones from China to JFK Airport, storing them in warehouses in Hicksville and Plainview for sale here in the U.S. Robert Eisenberg, 28 of Manhattan, was also found to be bringing in counterfeit phones, thanks to the six month, multi-agency sting operation.
Nicknamed "Operation: Long Distance Haul," the DA's office, Nassau County Police, ICE Homeland Security Investigations, and U.S. Customs and Border Protection collaborated in the investigation that began in January. JFK customs agents performed a random inspection of a cell phone shipment from China and were suspicious of the authenticity of the phones. According to the DA's office, the phones were shipped loose within unpackaged cardboard boxes.
Customs shipped the phones to their respective companies, including Motorola, HTC, LG, and Casio for testing. Those companies confirmed customs' suspicions and said the phones were counterfeit, citing design flaws and subpar technology and parts. Agents, with the help of the DA's office, orchestrated the sting by allowing shipments to reach their ultimate destinations. Eight more pallets of phones were sent via Air China between January and June.
"The defendants in this case allegedly sought to profit by providing the public with a substandard product…robbed manufacturers of their intellectual property, and robbed consumers of quality they come to expect and demand,” said James T. Hayes Jr., special agent in charge of HSI New York.
Chen is charged with five counts of second degree trademark counterfeiting and Zhang is charged with two counts of trademark counterfeiting. Charges could be upgraded to first degree trademark counterfeiting depending on the final count of items and their retail values.