A San Gabriel Valley man is expected to plead guilty Tuesday morning to federal charges that he participated in a scheme to manufacture and ship counterfeit laptop computer batteries from China to the United States, where the bogus batteries were sold to unsuspecting buyers via online marketplaces.
Zoulin “Allen” Cai, 29, has agreed to enter his guilty plea in downtown Los Angeles to one count of conspiracy to commit wire fraud and mail fraud and one count of aggravated identity theft, according to the U.S. Attorney’s Office. The charges carry a sentence of between two and 22 years in federal prison.
The La Puente resident, a Chinese national who moved to Los Angeles County in 2012, worked for Shenzhen Theseus Technology Co. Ltd., a China-based company. Theseus Technology, which was owned and operated by Cai’s relatives, manufactured counterfeit lithium-ion batteries, some of which were designed for laptop computers, prosecutors said.
Cai and various unindicted co-conspirators sold and shipped the counterfeit batteries to unsuspecting individual buyers via eBay and Amazon, falsely advertising them as brand-name new, genuine, original or OEM — original equipment manufacturer — products, the indictment alleges. The batteries allegedly bore counterfeit trademarks of companies such as Apple, Dell, HP, and Toshiba, as well as counterfeit certification marks of UL, a company that tests and certifies the safety of electronic products, federal prosecutors said.
Counterfeit lithium-ion laptop batteries pose significant safety risks — including the risk of extreme heat, fire, and explosions — and the batteries that Cai and his co-conspirators shipped frequently lacked required essential internal safeguards, prosecutors allege.
“Counterfeit goods are not manufactured with the same care as legitimate products backed by well-known companies and their highly developed intellectual property,” Acting U.S. Attorney Tracy L. Wilkison said after Cai’s arrest two years ago.
“The batteries involved in this case were sold to numerous unsuspecting online buyers, including one victim whose laptop started smoking and nearly caught fire after the battery was installed. Consumers need to exercise great caution when purchasing discounted items, particularly electronic goods, because these items pose very real safety risks.”
The counterfeit batteries allegedly were imported, sold and shipped from warehouses in La Puente and the City of Industry that Cai ran and where federal agents made undercover purchases of counterfeit laptop batteries from him on several occasions.
The indictment further alleges that from 2014 through last June, Cai and his co-conspirators fraudulently obtained at least $23.8 million from the sale of counterfeit laptop batteries through eBay and Amazon. They laundered those funds, including more than $18 million wired directly to Chinese bank accounts in the name of Theseus Technology, as well as other Chinese businesses involved in the conspiracy, federal prosecutors allege.
Cai allegedly used his ill-gotten gains for a variety of personal expenses, including monthly lease payments for a Maserati sports car.