Sixteen people indicted in multi-million dollar counterfeit cellphone scheme in Boise

The following is a news release from the U.S. Attorney for Idaho’s Office.

BOISE – Sixteen people living in the Treasure Valley have been federally indicted on drug trafficking, fraud, money laundering and counterfeit goods trafficking charges, U.S. Attorney Bart M. Davis announced Thursday.

The announcement comes a day after federal agents raided at least three homes and a business in the Boise area early Wednesday morning, confiscating boxes of undisclosed evidence, according to KIVI.

The indictments were issued last week by a federal grand jury sitting in Boise.

The grand jury returned a thirty-four count indictment charging Pavel Babichenko, Gennady Babitchenko, Piotr Babichenko, Timofey Babichenko, Kristina Babichenko, Natalya Babichenko, David Bibikov, Anna Iyerusalimets, Mikhail Iyerusalimets and Artur Pupko with conspiracy to commit wire fraud, mail fraud, conspiracy to traffic in counterfeit trademarked goods and money laundering conspiracy, all in connection with the online sale of counterfeit cellphones and accessories.

According to the indictment, the ten defendants operated a multi-million dollar scheme wherein they sold counterfeit cellphones and cellphone accessories on Amazon.com and eBay.com that the defendants misrepresented as new and genuine Apple and Samsung products. The indictment alleges that these counterfeit cellphones and cellphone accessories were obtained in bulk from manufacturers in Hong Kong, repackaged in the Treasure Valley, and then individually resold to consumers online as genuine and new. The indictment also alleges the defendants laundered millions of dollars in proceeds from the fraudulent scheme.

Following the Organized Crime and Drug Enforcement Task Force investigation, the grand jury also returned six indictments charging six persons with drug crimes. Tetyana Vasilevna Andriychuk, distributing heroin; Jeffrey Scott Davis, distributing methamphetamine; Pavel Matlashevsky, two counts of distributing heroin; Alexandr Stricharskiy, three counts of distributing methamphetamine; Sergey Zagorodny, distributing cocaine and sale of a firearm to a prohibited person; and, Vadim N. Dmitruk, possession with intent to distribute heroin.

Drug distribution charges carry mandatory minimum prison sentences depending on the amount and type of drugs distributed. Maximum prison sentences range from up to 20 years all the way to life.

“Combatting transnational organized crime is one of the FBI’s top priorities, and these cases demonstrate that the FBI remains committed to holding accountable all those who attempt to defraud U.S. citizens and U.S. companies, distribute illegal drugs, or conduct illegal activity simply to enrich themselves,” said FBI Special Agent in Charge Eric Barnhart. “From the arrests, to the millions of dollars in assets forfeited, the law enforcement agencies who participated in this investigation were able to deliver a decisive blow to these criminal enterprises because of the excellent, collaborative, working relationships that exist here in Idaho, and our strong international partnerships with law enforcement around the world. Thank you to everyone who worked tirelessly over the last four years to secure these indictments and arrests.”

“The United States Attorney’s Office is committed to the comprehensive investigation and prosecution of criminal activity that is harmful to our country, communities, and members of our society, all of whom we are sworn to protect,” said U.S. Attorney Bart Davis. “The dedicated women and men of my office have always, and will always, seek to hold accountable those who engage in fraud and illegal drug trafficking. These prosecutions demonstrate our commitment to prosecuting those who seek to profit at the expense of others, be it by fraudulent conduct or selling harmful, illegal drugs to others. In addition, the type of fraud involved here hurts not only the thousands of unsuspecting consumers who purchased counterfeit goods, but also the company – the trademark holders. Counterfeited products degrade the goodwill of the trademark holders, deceive consumers, and pose a serious safety risk to the community.”

These indictments are the result of a joint investigation by the Organized Crime and Drug Enforcement Task Force comprised of the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Immigration and Customs Enforcement Homeland Security Investigations, Internal Revenue Service and United States Marshals Service. These federal agencies were joined in the investigation by the United States Postal Inspection Service, National Insurance Crime Bureau, U.S. Customs and Border Protection, Hong Kong Police Force, Boise Police Department, Meridian Police Department, Nampa Police Department and the Idaho State Police.

An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.