U.S. Woman Sentenced for Selling $90m-worth of Fake Phone Parts

Computers and Software
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A U.S. woman, 59-year-old Sherrie Householder, who sold more than $90m-worth of fake cell phone parts has been jailed for two years.

According to the Department of Justice, Householder duped hundreds of thousands of consumers through various e-commerce sites and at a store in Springfield, Missouri.

Householder represented that the cell phone components were manufactured by legitimate companies – including Apple, Samsung, LG, Microsoft, Android, Dell, Blackberry, ASUS, Acer, Kindle, HTC, Motorola, Nokia, Sony, ZTE and others. Although each part contained trademarks and markings that made it appear the legitimate holder of the trademark had manufactured the parts, and although Householder used the trademarks and logos of these companies on her Web sites, the components were actually counterfeit.

Wang “Frank” Luo, a Chinese citizen, owned Flash Tech, while Householder managed the company’s activities in the United States. Lou shipped the cell phone component parts to Householder. Nearly 5,000 international shipments were sent to Flash Tech from China.

Flash Technology supplied hundreds of thousands and “potentially millions” of replacement screens, lithium batteries, weight scales, phone cases and internal circuitry to customers across the U.S., racking up $90m in sales between December 2012 and January 2016.

Between August and December 2015, over a dozen shipments from Luo’s factory in China to Householder in Springfield were intercepted and inspected by CBP agents. After seizing each shipment, CBP issued a letter of notification informing Householder of the seizure due to confiscated counterfeit items. Even though she was informed that the items she received from Luo were counterfeit, she continued selling these counterfeit products. Between August 2015 and the execution of federal search warrants on Feb. 2, 2016, Householder sold approximately $8,860,000, in counterfeit cell phones and component parts.

When federal agents executed search warrants at Householder’s residence and Flash Tech’s business address, they seized over 100,000 cell phone and component parts. The counterfeit items seized by agents had a retail value of approximately $5.5 million and filled two large moving trucks.

Householder must forfeit to the government $556,938 seized from various PayPal, Amazon and bank accounts; numerous desktop and laptop computers, iPads, hard drives, computer and cell phone components; and a money judgment of $8,866,069, according to the Department of Justice.

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About Ufuoma Akpotaire 311 Articles
Ufuoma is a Senior Editor and Director of Regulatory Policy at NLIPW. She assists clients in the protection of copyrights, trademarks and patents. She counsels clients regarding validity and infringement matters and has experience acting against the infringement of IP and addressing counterfeit issues. She holds a Masters degree (LL.M.) from Columbia Law School, New York and a law degree from the University of Nigeria (LL.B. Honors). She is admitted to practice law in Nigeria and in the State of New York. Ufuoma cut her teeth in the intellectual property practice groups of some of the largest law firms in Nigeria and has years of experience working with major non-profit organizations in New York. Email: uakpotaire@nlipw.com