Taiwan law enforcement has uncovered a business operation in Taiwan that was selling counterfeit iPhone and Samsung phones to unsuspecting buyers. This potentially criminal operation has also been revealed to have ties to China as more details come to the surface.
Police in Taiwan were given a tip that a store located in the northern Taiwanese city of Taoyuan was selling second-hand phones and demo units. Demo Units are generally those used for display and are only sold at a later date for a fair discount. These units were said to be carrying the Apple and Samsung brand name and were being sold for 2,000 to 5,000 Taiwan dollars which would be 65 to 162 US dollars.
Upon arrival, the police discovered nearly 3,900 tech items while searching that if authentic could have easily reached a market value of over 10 million Taiwan dollars which would be 324,900 US dollars. Items varied from brand-name smartphones to accessories such as chargers and headphones. These items were seized by police upon discovery. Reports of this situation were made public in a daily Taiwan newspaper called the Liberty Times on January 30th, but no official date of the actual discovery was disclosed.
These knockoffs were sold beyond the store. Police found proof of the phones, as well as their accessories, being sold on two popular e-commerce sites in Taiwan called Ruten and Shopee.
After further investigation involving the analysis of approximately 200 phones (135 iPhone and 44 Samsung phones), the Taiwan police found that the phones malfunctioned very easily and were built as knockoffs with fake components. The only items that were deemed authentic were the chips used to power the smartphones. As an example, the counterfeit iPhone 6 would be powered by an A6 chip that is used more commonly to power an iPhone 5.
Four people were arrested for this operation, including a 22-year old man from China who went only by the surname Li and three other employees who were hired to work at the store in Taiwan.
Li reported to the police in Taiwan that he was hired by a Chinese criminal ring located in central China’s Hubei Province to travel to Taiwan and manage the counterfeit tech operation in exchange for a monthly salary of 12,000 New Taiwan Dollars equaling about 390 US dollars. He was reported repairing phones and helping with online sales.
Li also confessed to arriving in Taiwan under the pretense of getting aesthetic surgery. Taiwan generally offers what is considered a medical tourism visa that lasts for 15-days. It is very common for those residing in mainland China to come to Taiwan for medical services such as vaccinations due to the scandals involving substandard vaccines in China. Li was planning to use this visa and then fly back to China after things were settled had he not been arrested.
Before being caught, an account book seized from the store showed that this operation had generated a monthly revenue of 2 million Taiwan Dollars, equal to 64,986 US dollars, since May of 2018. The four men caught have already been charged with violations of Taiwan trademark law.
The link to China comes as very little surprise to most considering their history of manufacturing counterfeit protects such as shoes, clothes, and electronics. In fact, only a year ago there was a scheme involving iPhones brought over from China reported in the San Francisco-based digital media The Information. The situation involved the buying or stealing of iPhones in an attempt to replace their parts with cheap alternatives and then return them as malfunctioned gear in order to get a replacement. China is one of the world’s largest manufacturers and as such holds a lot of power when it comes to the productions of goods. To this day U.S. customs officials are still seizing a massive amount of shipments before they were able to make it to the U.S. market.
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