Did the iPhone knockoffs fool you? China arrests company behind $19 million fraud

Published July 29th, 2015 - 06:18 GMT

Chinese authorities have arrested nine people in connection to a company that manufactured tens of thousands of fake iPhones worth $19.4 million.

The arrests in Beijing came after knockoff phones were confiscated in the United States in May, The Wall Street Journal reported.

Among those arrested were the two ringleaders — a married couple from Shenzhen, who disguised their factory as a gadget maintenance company, Fortune reported.

The 43-year-old man with the last name Yu and his 40-year-old wife, with the last name Xie, are accused of purchasing used mobile main boards from overseas and knockoff components that carried the Apple logo from the tech hub of Shenzhen.

Beijing police said the couple disguised up to six production lines where hundreds of workers assembled the products in China's capital, then exported the fake Apple phones.

China accounts for 70 percent of all counterfeit goods seized around the world, according to 2012 data from the International Chamber of Commerce.

The value of the knockoff products reached $1.7 trillion.

Apple's rising presence in China can be found in cities like Kunming, where in 2011 trade authorities discovered 22 fake Apple retail outlets.

The resemblance to Apple even deceived the Kunming staff — some who believed they were working at a store affiliated with the Cupertino, Calif., company.

China is Apple's manufacturing base and also the company's second-largest market after the United States.

By Elizabeth Shim

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