A Dublin-based Chinese businessman has been jailed for seven years and nine months over a money-laundering operation connected to an international €10 million “zombie” iPhone fraud.
Chengwen Guo (43), who was described in court as the “Irish representative of a transnational crime organisation”, pleaded guilty at Dublin Circuit Criminal Court to theft and money-laundering offences on dates between 2021 and 2022.
Guo, of Ivy Exchange, Parnell Street, Dublin, owned a number of mobile phone shops called Murray Mobile, with eight stores in locations including Blackrock, Dundrum, Sutton Cross, Ranelagh and Newbridge. Guo has one previous conviction for having a false passport at Gatwick Airport in the UK, for which he received a custodial sentence of 13 months, the court was told.
The court heard three sums of money seized in January 2022 included €6,515 found in an Audi Q7 car registered to Guo; €143,245 at his home address; and €20,700 at Murray Mobiles on Main Street in Dundrum, Dublin 14.
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Three Rolex watches were also found when gardaí searched his Parnell Street apartment in Dublin. His Audi has yet to be seized, the court heard.
Judge Martin Nolan described Guo as “a very energetic man” who had engaged in “very substantial criminal misbehaviour”.
“This man deserves a severe custodial sentence,” said Judge Nolan. The judge said it was “white-collar deviance”. The judge said “there was a gap there” and “the situation was found out”.
The court was told the fake or “zombie” phones from China were exchanged under warranty for genuine iPhones which were then sent to countries outside of the EU for resale. The court heard 10,158 phones provided to Guo were last active mostly outside Ireland. The total retail value of the Apple products was €10,262,617.
Det Sgt Robert Madden of the Garda National Economic Crime Bureau told the court that representatives from Apple Corporation were in court for the hearing.
The scheme operated on the basis of the Apple warranty on its phones. The fraud involved sending in fake iPhones for repair and then claiming a replacement under Apple’s one-year warranty scheme. These fake phone components would come from China and would be assigned the EMEI number of a genuine iPhone when sent for repair. The replacement genuine iPhones would then be sent to Hong Kong for resale to countries outside the EU.
The court heard Guo also sold counterfeit Apple products such as power chargers, charging cables and phone cases in his shops.
In July 2021, counterfeit Apple goods, including 15 damaged iPhones and sim trays, were found after a package was sent to Ireland addressed to “Johnny Cheng” – which the court heard was a name the defendant used in Ireland for its simplicity rather than his Chinese name – at Murray Mobile in Main Street, Dundrum.
Gardaí commenced an investigation and searches of all eight Murray Mobile shops took place on January 10th, 2022.
Last month, Guo’s co-accused, who was an employee of Fonfix, a tech repair business in Sandyford, south Dublin, was jailed in the same court.
Lukasz Lupa (45) of Kukukcza, Wagrowiec, Poland was given a 4½-year prison sentence after pleading guilty to two counts of facilitating a criminal organisation on dates between June 5th, 2019, and September 3rd, 2021, under section 72 of the Criminal Justice Act, 2006.
Lupa had claimed he did not know what he was doing was illegal and received little financial benefit for his part in the warranty fraud.
Det Sgt Madden said Apple realised that the number of units Guo was sending in was unusually high.
He told Eoin Lawlor SC, prosecuting, the phones would not power on and a diagnostic could not be performed on them. The phones were submitted without proof of purchase in the name of a company that runs a legitimate business and was not at fault, the court heard. Guo received brand new phones and was getting €30 to €40 per unit.
Diana Stuart SC, defending, told the court in mitigation that Guo has four children. One is in boarding school in the UK and one is in boarding school in Ireland. He also has a child in university in Edinburgh. His wife’s day-to-day living expenses amount to €1,000 a week, Ms Stuart told the court.
Judge Nolan said the appropriate global sentence was one of seven years and nine months.
