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FBI busts counterfeiters who took Apple for $6.1M in iPhone, iPad scams

Nov. 14 (UPI) --

Federal agents have busted an international counterfeiting ring that swindled technology giant Apple out of more than $6 million, U.S. prosecutors said Thursday.

The Justice Department unsealed a 25-page indictment in the case Wednesday, which said FBI agents arrested 11 suspects in Southern California and are looking for three more.

Prosecutors said the perpetrators imported more than 10,000 counterfeit iPhones and iPads from China, damaged them and exchanged them for new devices at U.S. and Canadian Apple stores. The department said the scheme cost Apple about $6.1 million.

The 14 accused face charges of fraud, conspiracy, identity theft and money laundering.

Investigators said the ring was led by three brothers, who agents arrested along with their wives. Authorities also seized $250,000 cash and 90 potentially counterfeit iPhones.

Prosecutors said the ring used International Mobile Equipment Identity and serial numbers that matched real devices so they could fool store workers, a form of aggravated identity theft.

While a significant amount of money in any circumstance, this prosecution is about more than monetary losses, U.S. Attorney Robert Brewer said in a statement. The manufacture of counterfeit goods -- and their use to defraud U.S. companies -- seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities.

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