Business ProfileforWireless Association, LLC

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government allegations, which have not yet been proven.

On August 15, 2018, in the United States District Court for the District Idaho, the United States of America filed a 34 count Indictment against Pavel Babichenko, Gennady Babichenko, Piotr Babichenko, Timofey Babichenko, Kirstina Babichenko, Natalya Babichenko, David Babikov, Anna Iyerusalimets, Mikhail Iyerusalimets and Artur Pupko charging each person with conspiracy to commit wire fraud, mail fraud, conspiracy to traffic in counterfeit trademarked goods and money laundering conspiracy, all in connection with the online sale of counterfeit cellphones and accessories.

According to the indictment, Pavel Babichenko owned and controlled the following entities, among others: Babichenko LLC, Midstar Distributor LLC, Midstar LLC, Midway Distributors Inc., Midway Distributor LLC, Midway Cellular LLC, Pacific Cellular Distributor LLC, Power Moxie LLC and Sahara Case LLC.  Pitro Babichenko owned and controlled the following entities, among others: Blue Ocean Distribution LLC, Midway Distributor LLC, Mobi LLC, Mobi Recycle LLC, Mobile Recycle LLC, Mobi Recycling, Power Moxie LLC and Sahara Case LLC. Timofey Babichenko owned and controlled the following entities, among others: Ariginall LLC, Global Distributing LLC, Global Distributors LLC, Sahara Case LLC, Wholesale Gadgets LLC, and Wholesale Cell Phones LLC.  Gennady Babichenko owned and controlled the following entities, among others: Babichencko LLC; Babichenko Dental Lab Inc.; Babichenko & Sons LLC, European Denture Center, Morning Star Christian Church Inc., Russian Christian Church, and Morning Star Mission, Inc.  Kristina Babichenko owned and controlled the following entities, among others: Cell Phone Geeks LLC, Global Distributors LLC and Wireless Closeouts LLC.  Natalya Babichenko owned and controlled the following entities, among others: Midstar Distributor LLC, Midstar LLC and Midway Distributor LLC.  Anna Iyerusalimets owned and controlled the following entities, among others: Droid Masterz LLC, Mountain Wireless Distributing LLC, Peg-A-Phone LLC and Western Trade LLC.  Mikhail Iyerusaliments owned and controlled the following entities, among others: Cell Zone LLC, Droid Masterz LLC, Electro Metro LLC, Mobile Rack LLC, Mountain Wireless Distributing LLC, Peg-A-Phone LLC, Western Trade LLC, Simplified Selling LLC and Vast Trace LLC.  Artur Pupko owned and controlled the following entities, among others: AlphaCell LLC, AnchorCell LLC, Cell2U4Less LLC, CellLife LLC, Cellularity LLC and Purecell LLC.  David Bibikov owned and controlled the following entities, among others: Bibs Electronics LLC, Case & More LLC, CellTalk LLC, Cell Function LLC, Speedy Wireless LLC and Tech4RLess LLC.

According to the indictment, beginning in or about January 2008 and continuing through on or about August 14, 2018, the ten defendants operated a multi-million dollar scheme wherein they sold counterfeit cellphones and cellphone accessories on Amazon.com and eBay.com, as well as their own websites, that the defendants misrepresented as new and genuine Apple and Samsung products.  The indictment alleges that these counterfeit cellphones and cellphone accessories were obtained in bulk from manufacturers in Hong Kong, repackaged in the Treasure Valley, and then individually resold to consumers online as genuine and new.  The indictment also alleges the defendants laundered millions of dollars in proceeds from the fraudulent scheme.

If convicted, the defendants face up to 20 years’ imprisonment and a $250,000 fine on the money laundering, wire fraud, and mail fraud counts.  They face up to 10 years’ imprisonment and a $5,000,000 fine on the counterfeit trademark goods trafficking counts.  Reference is made to the indictment and court record for further information. 

An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

The Court acquitted Gennady Babichenko on a Rule 29 motion, and the jury acquitted Natalie Babichenko.

One defendant, Artur Pupko, pleaded guilty in September 2019, and he has yet to be sentenced.

On August 1, 2022, a Federal jury in Idaho convicted five defendants for their roles in operating a $41 million dollar scheme wherein they sold counterfeit cellphones and cellphone accessories on Amazon.com and eBay.com which they misrepresented as new and genuine Apple and Samsung products.

Pavel Babichenko, Piotr Babichenko, Timofey Babichenko, David Bibikov, and Mikhail Iyerusalimets were convicted of a total of 24 counts of conspiracy to commit wire fraud, conspiracy to traffic in counterfeit trademarked goods, wire fraud, mail fraud and trafficking in counterfeit goods, all in connection with the online sale of these counterfeit cellphones and accessories.

Two defendants, Kristina Babichenko and Anna Iyerusalimets, were found not guilty. 

The convicted defendants face up to 20 years’ imprisonment and a $250,000 fine on the wire fraud and mail fraud counts. They face up to 10 years’ imprisonment and a $5,000,000 fine on the trafficking in counterfeit goods counts. Sentencing is scheduled for November 2 and 3, 2022 before U.S. District Judge B. Lynn Winmill, who presided over the trial.

During the nine-week trial, the jury heard evidence that the defendants obtained counterfeit cellphones and cellphone accessories in bulk from manufacturers in China, repackaged them in the Treasure Valley area of Idaho, and then individually resold them to consumers on Amazon and eBay as genuine and new. The defendants continued to sell these items despite receiving numerous notices from U.S. Customs and Border Protection that they were importing counterfeit items. The defendants also repeatedly ignored cease-and-desist letters from companies like Apple, Inc. and Samsung Electronics America. When companies like Amazon.com identified the defendants as sellers of counterfeit products and suspended their selling privileges, the defendants would submit fake invoices and plans of actions to regain access to Amazon.com’s platform and convince the company to release proceeds of the scheme. This pattern lasted for approximately a decade, with the defendants changing company names and tactics when confronted about their behavior.

For more information about this case visit https://www.justice.gov/usao-id/pr/five-defendants-convicted-relation-multi-million-dollar-counterfeit-cellphone-scheme or call 208-334-1211.