CUPERTINO (CBS SF) – Federal authorities have indicted 14 people, including two Bay Area men, linked to a multi-million dollar scheme involving counterfeit Apple iPhone and iPad devices, which U.S. attorneys described as the “biggest fraud of its kind” in Southern California.

According to the U.S. Attorney’s Office for the Southern District of California, agents served 11 search warrants at locations in San Diego County and seized an estimated $250,000 in cash along with 90 iPhones.

Eleven people were arrested in the operation, authorities said.

Hyo Weon Yang (FBI)

Two Bay Area men, 31-year-old Phillip Pak of Richmond, and 31-year-old Hyo Weon Yang of San Francisco, were among those indicted. Yang is one of three suspects who remain at large.

According to the indictment, the ring imported more than 10,000 counterfeit iPhones and iPads from China. The defendants took the devices to Apple stores in the U.S. and Canada, claiming they were damaged and under warranty. After exchanging the counterfeit devices for genuine ones, the defendants shipped the real iPhones and iPads to China and other countries, which were sold at a premium.

Attorneys said the counterfeit devices had IMEI and serial numbers that matched those of genuine devices purchased and used by other persons and covered by an Apple warranty in the U.S. or Canada.

Apple said the loss from the counterfeit devices exceeds $6.1 million, which the Cupertino-based tech giant said was a conservative estimate.

Federal authorities announce 14 indictments in a mulit-million dollar scheme involving counterfeit iPhones and iPads at a news conference in San Diego on November 13, 2019. (US Attorney's Office for the Southern District of California / Twitter)

Federal authorities announce 14 indictments in a mulit-million dollar scheme involving counterfeit iPhones and iPads at a news conference in San Diego on November 13, 2019. (US Attorney’s Office for the Southern District of California / Twitter)

“This significant investigation and the indictment of these 14 individuals shows the FBI’s commitment to working with the United States Attorney’s Office and our law enforcement partners to combat international fraud schemes that affect American citizens and American businesses against counterfeit goods originating in China and those fraudsters who exploit American trademarked products for their personal financial gain,” FBI Special Agent Scott Brunner said.

The defendants face numerous charges, including conspiracy to commit mail fraud, wire fraud, mail fraud, money laundering and identity theft.

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