Five defendants convicted in counterfeit cellphone scheme

BOISE, Idaho (CBS2) — A federal jury in Idaho convicted five defendants on Tuesday for operating a $41 million scheme selling counterfeit cellphones and cellphone accessories on Amazon and eBay.

Pavel Babichenko, Piotr Babichenko, Timofey Babichenko, David Bibikov, and Mikhail Iyerusalimets were convicted of 24 counts ofconspiracy to commit wire fraud, conspiracy to traffic in counterfeit trademarked goods, wire fraud, mail fraud and trafficking in counterfeit goods.

The convicted defendants face up to 20 years' imprisonment and a $250,000 fine on the wire fraud and mail fraud counts. For the trafficking in counterfeit goods counts, they face up to 10 years' imprisonment and a $5,000,000 fine.

According to the United States Attorney's Office, the defendants obtained counterfeit cellphones and cellphone accessories in bulk from a manufacturer in China, repackaged them in the Treasure Valley, and resold them to consumers on Amazon and eBay.

The defendants continued to sell these items despite numerous notices from U.S. Customs and Border Protection saying they were selling counterfeit items and cease-and-desist letters from companies like Apple and Samsung.

When they were identified as sellers of counterfeit products from companies like Amazon, the defendants would submit fake invoices and plans of action to regain access to Amazon's platform and change company names tactics. They repeated this process for approximately a decade.

“By trafficking in counterfeit cellphones, chargers, and batteries, the defendants led an organized criminal conspiracy that violated intellectual property rights, cheated the American consumer, and endangered the safety of the public for their own financial gain,” said U.S. Attorney Josh Hurwit. “The U.S. Attorney’s Office is committed to working with its federal law enforcement partners to identify, arrest, and prosecute those who defraud businesses and consumers in an attempt to line their own pockets. I want to thank the FBI and HSI special agents and analysts for their tireless work on this investigation and prosecution.”

Sentencing is scheduled for Nov. 2 and 3, 2022 before U.S. District Judge B. Lynn Winmill, who presided over the trial.

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