Target of joint ICE HSI Washington, D.C. and USPIS Washington, D.C. investigation sentenced to 1 year and 1 day in federal prison for mail fraud

WASHINGTON – U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) Washington, D.C. joined forces with the U.S. Postal Inspection Service (USPIS), Washington, D.C. to investigate three Chinese citizens for a scheme to defraud Apple, Inc. out of more than $1 million. One suspect in the investigation was sentenced in a federal court on March 10. Teang Liu, 38, of Alexandria, Virginia, a citizen of the People’s Republic of China, was sentenced to 12 months and one day in prison for participating in the conspiracy.

Liu pleaded guilty in February 2021, in the U.S. District Court for the District of Columbia, to one count of conspiracy to commit mail fraud. In addition to the prison term Liu was ordered to pay $577,780 in restitution and $57,780 in a forfeiture money judgment. Following his prison term, Liu will be placed on a year of supervised release.

Liu is one of three conspirators in the case. Liu, Haiteng Wu, and Jiahong Cai were arrested in December 2019. Wu and Cai were detained from the time of their arrests to their sentencings. Each pleaded guilty to conspiracy to commit mail fraud in May 2020. On February 1, Haiteng Wu, was sentenced to 26 months (time served) in federal prison and ordered to pay $987,000 in restitution. Cai ultimately ended up spending five months at a D.C. jail as part of her sentence. She also was ordered removed from the United States.

Liu moved to the United States in 2011. In 2014, he obtained his master’s degree in finance from George Washington University. From at least June 2016 to at least June 2018, he actively participated in the conspiracy to defraud Apple. Liu was recruited to join the conspiracy by Wu. Wu also recruited Cai, Wu’s wife, to participate in the scheme. Like Liu, Wu and Cai are citizens of the People’s Republic of China.

As part of the scheme, the conspirators received shipments of inauthentic iPhones from Hong Kong. Those phones contained spoofed IMEI numbers and serial numbers that corresponded with authentic in-warranty iPhones. The conspirators then returned the inauthentic phones to Apple, claiming that the phones were legitimate, in-warranty phones, all in an effort to receive authentic replacement iPhones from Apple. The fraudulently obtained authentic iPhones were then shipped back to conspirators overseas, including in Hong Kong.

Liu’s particular role in the conspiracy included opening dozens of commercial mail agency mailboxes - mostly at UPS Stores - using fake identification cards that Wu provided to him, returning fraudulent phones to Apple retail stores, and traveling to the Rocky Mountains and Florida to facilitate the fraud.

The conspirators acknowledged successfully defrauding Apple out of more than $1 million and intending to defraud the company out of even more money.

This case was investigated by the U.S. Department of Homeland Security (DHS), HSI, and USPIS. It was prosecuted by Assistant U.S. Attorney Kondi Kleinman of the U.S. Attorney’s Office for the District of Columbia’s Fraud, Public Corruption, and Civil Rights Section, and Senior Counsel Ryan K.J. Dickey of the Justice Department’s Computer Crime and Intellectual Property Section. They were assisted by Paralegal Specialists Michon Tart, Mariela Andrade, Amanda Rohde, and Brian Rickers, former Paralegal Specialists Jessica Mundi, Brittany Phillips, and Angeline Thekkumthala, and Records Examiner Angela De Falco.

HSI is a directorate of ICE and the principal investigative arm of DHS, responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 special agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.