2 Chinese Nationals Face Federal Indictment For Conspiracy To Traffick Counterfeit Ray Bans, Pandora Jewelry, Mail Fraud
BALTIMORE (WJZ) — A federal grand jury has indicted Xiaoying Xu, 34, and Yiwen Zhu, 34, both Chinese citizens and legal permanent residents of the U.S., on a federal conspiracy charge, mail fraud and trafficking in counterfeit goods.
The indictment was returned April 23, and the defendants, who both live in Covina, California, were arrested Wednesday.
"These defendants allegedly imported counterfeit goods from China and sold them as legitimate merchandise using the registered trademarks of legitimate companies." said U.S. Attorney Robert K. Hur. "Those who traffick in counterfeit goods are committing a crime which results in American jobs lost, American business profits stolen, and American consumers tricked into receiving substandard products."
According to the 13 count indictment, from August 2016 to April 2019, Xu and Zhu conspired with others to defraud e-commerce customers by importing and selling counterfeit consumer goods, specifically Pandora jewelry and Ray-Ban sunglasses.
The indictment alleges the defendants used their residence and offices in El Monte and Alhambra, California as destination points for shipments of counterfeit goods shipped from Hong Kong and China.
Xu and Zhu allegedly repackaged the counterfeit goods, then mailed them to unsuspecting customers who believed they had purchased authentic goods.
The two allegedly used fraudulent accounts set up with e-commerce marketplace companies to sell the counterfeit goods, misrepresenting to customers that they were authentic.
Xu and Zhu got funds from the victims through fraudulently acquired customer accounts opened in the names of other people at a global online payment company.
The payment company sent the victims' money to the duo electronically to bank accounts or by check, which they then cashed at ATMs.
The indictment alleges that the defendants then transferred the proceeds of the scheme from their bank accounts to other bank accounts opened in the names of other Chinese nationals.
If convicted, they face a maximum sentence of five years in prison for conspiracy to commit mail fraud and traffick in counterfeit goods, a maximum of 20 years in prison for each of six counts of mail fraud, and a maximum of 10 years in prison for each of six counts of trafficking in counterfeit goods.
The defendants are expected for their initial appearance in the Central District of California.
No court appearance has been scheduled yet in Maryland.
