Millions In Counterfeit iPods, iPhones Seized At LA Port

UPDATE: Charges against the two suspects arrested in connection with this case were dropped in May of 2011.

LOS ANGELES (AP) — Authorities in the nation's largest port complex seized phony iPods, iPhones and other electronics in an investigation of a major counterfeiting ring, port police said Monday.

Counterfeit goods with an estimated street value of more than $1.4 million were seized in December and January, along with about $2.5 million in stolen electronics, toys, and blankets.

Also seized were bank account receipts indicating the operation took in more than $7 million, Port of Los Angeles spokesman Phillip Sanfield said.

"The bank receipts indicated that they were doing a robust business," he said.

The items included fake Apple iPods, iPhones and Sony electronic gear, Sanfield said.

The phony devices were shipped from Asia in the form of generic-looking parts then assembled, labeled and packaged in Los Angeles warehouses, he said.

"It may be that the goods came in legally as electronics but once they got to these warehouses in L.A., there was an elaborate counterfeit operation there with packaging, boxes, and labels that made these goods almost indistinguishable from Apple products," Sanfield said.

The products had limited capability. For example, the phones worked but were unable to download from iTunes.

The fakes may have been sold at swap meets, small downtown shops and possibly over the Internet for about half the going retail cost of the real items.

Brothers Bahram Zahab, 45, and Edward Zahab, 40, both of Los Angeles, were arrested on suspicion of selling counterfeit goods. Both pleaded not guilty on Feb. 3 to counterfeiting goods, district attorney's spokeswoman Jane Robison said. Charges against the two men were later dropped.

Robison and Sanfield did not know if the men had obtained attorneys. They remained free pending future hearings.

"These guys seem to be the importers, but there may be more of them" and the investigation was continuing, Sanfield said.

Federal, state and local agencies took part in the investigation, which began as a probe into stolen goods.

"Our standing as the largest shipping container port in the country is in no small part predicated on the security we can offer our clients," Mayor Antonio Villaraigosa said in a statement. "Counterfeiting takes jobs and revenue away from our city's coveted creative industries."

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