LOS ANGELES – A San Gabriel Valley man pleaded guilty today to federal criminal charges for participating in a multimillion-dollar scheme to manufacture and ship counterfeit laptop computer batteries and other electronics from China to the United States, where the bogus batteries were sold to unsuspecting buyers in online marketplaces.
Zoulin Cai, a.k.a. “Allen Cai,” 29, of La Puente, pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud and one count of aggravated identity theft.
According to his plea agreement, Cai conspired to import 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 individual buyers via eBay and Amazon, falsely advertising them as brand-name new, 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 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.
Cai and his co-conspirators established numerous U.S.-based corporations to facilitate the importation and sale of counterfeit lithium-ion batteries and other electronic accessories for laptop computers and cellular telephones.
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.
In December 2019, Cai’s warehouse (including containers on the premises) contained approximately 44,000 batteries, as well as approximately 175,000 labels, bearing the counterfeit marks of multiple companies, including Apple, Dell, HP, Toshiba, Lenovo, Asus, Acer and Samsung, according to the plea agreement.
Cai admitted that from March 2014 to June 2019, he and his co-conspirators fraudulently obtained approximately at least $3.5 million and as much as $23,831,668 from the sale of laptop batteries through eBay and Amazon. During that time, Cai and his co-conspirators sent approximately $18,094,960 through wire transfers from U.S.-based bank accounts that they owned and controlled directly to Chinese bank accounts.
United States District Judge John F. Walter has scheduled an October 4 sentencing hearing, at which time Cai will face a statutory maximum sentence of 22 years in federal prison.
Homeland Security Investigations investigated this matter and was assisted in this investigation by the brand-holding companies.
Assistant United States Attorney Julia S. Choe of the General Crimes Section and Assistant United States Attorney Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section are prosecuting this case.