A La Puente man faces up to 22 years in federal prison for his role in a scheme to manufacture and ship counterfeit lithium-ion batteries for laptops and cell phones from China to the United States, officials said Tuesday.
The batteries were sold on eBay and Amazon as genuine batteries from companies such as Apple, Dell, Samsung, Toshiba and Hewlett-Packard.
Zoulin Cai, who is also known as Allen Cai or Lin Cai, pleaded guilty Tuesday, June 29, to aggravated identity theft and conspiracy to commit wire fraud and mail fraud, the U.S. Attorney’s Office said in a statement. The 29-year-old will be sentenced on Oct. 4.
From March 5, 2014 through June 20, 2019, Cai and his accomplices fraudulently obtained at least $3.5 million and as much as $23,831,668.78 from the sale of laptop batteries through eBay and Amazon, according to court documents. In the same time period, he and the others sent about $18,094,960 through wire transfers from bank accounts in the U.S. to Chinese bank accounts.
Cai conspired to import batteries, labels for batteries in laptop computers, cellphones, and other electronics from China to the United States. He then sold and shipped the counterfeit batteries to unsuspecting buyers, federal authorities said.
He falsely advertised them as new, genuine batteries which carried trademarks of well-known technology companies and certification marks of a company that certifies the safety of electronic products, officials said.
The trademarks were counterfeit.
“Counterfeit lithium-ion laptop batteries pose significant safety risks – including the risk of extreme heat, fire and explosions – and the batteries that Cai and his co-conspirators shipped frequently lacked required and essential internal safeguards,” according to the statement.
On December 2019, Cai’s warehouse and containers on the site contained about 44,000 batteries and approximately 175,000 labels bearing the trademarks of different companies including Apple, Dell, HP, Toshiba, Lenovo, Asus, Acer and Samsung, court documents said.
Court documents listed seven accomplices; six are living in China. They have not been indicted.
The accomplices in China packaged the batteries and electronics then shipped them to America, sometimes covering the trademarks with black tape or a similar material, so that a quick inspection of the items by U.S. Customs and Border Protection would not reveal the trademark, the court documents said.
Once the batteries and labels arrived at Cai’s warehouse, federal officials said, he and his employees added labels bearing counterfeit marks to the batteries, prior to shipping them to buyers.
From March 23, 2014 through late 2016, Cai used a warehouse at 14839 Proctor Avenue, Suite B, which is in La Puente and also referred to as an Industry address, according to court documents. From late 2016 to Dec. 17, 2019, Cai used a warehouse at 13725 Proctor Avenue, Unit B.
Homeland Security Investigations investigated the case.
