Legal Issues

5 Family Members Sentenced to Prison For $50 Million Cell Phone Scam

5 Family Members Sentenced to Prison For $50 Million Cell Phone Scam

Five members of a family have been sentenced to federal prison for a counterfeit cell phone scam involving over $50 million. 

According to an official release from the IRS, Pavel Babichenko, Piotr Babichenko, Timofey Babichenko, David Bibikov, and Mikhail Iyerusalimets were found guilty by a jury in August 2022. Now, all five defendants have had their prison sentences handed down by Senior U.S. District Judge B. Lynn Winmill.

The group was convicted of conspiracy to commit wire fraud, mail fraud, and conspiracy to traffic in counterfeit trademarked goods for selling branded counterfeit cell phones via online marketplaces like Amazon and eBay. 

GettyImages-1355774789_resized_cell-phone
Credit: d3sign/Getty Images

The IRS shared that the defendants scammed buyers by advertising the electronics as new, authentic Apple and Samsung products. In reality, the counterfeit smartphones and accessories were purchased in bulk from manufacturers in Hong Kong and repackaged by the family in Treasure Valley, Idaho before being listed online.

In total, the Babichenkos, Bibikov, and Iyerusalimets earned over $50 million from their counterfeiting scheme. 

Their prison sentences are as follows:

1. Pavel Babichenko - 72 months in federal prison, a $21,000 fine, and three years of supervised release. A $33,708,700.30 forfeiture money judgment was also entered.

2. Piotr Babichenko - 48 months in federal prison, a $10,000 fine, and three years of supervised release. A $3,316,882.40 forfeiture money judgment was also entered.

3. Timofey Babichenko - 48 months in federal prison, a $10,500 fine, and three years of supervised release. A $9,230,196.82 forfeiture money judgment was also entered.

4. David Bibikov - One month in federal prison, nine months of home detention, and three years of supervised release. A $4,710,207.11 forfeiture money judgment was also entered.

5. Mikhail Iyerusalimets - Two months in federal prison, nine months of home detention, and three years of supervised release. A $953,411.95 forfeiture money judgment was also entered.

prison-GettyImages-658121355-resized
Photographer: WIN-Initiative/Neleman/Getty Images

"These sentencings are the result of law enforcement's unrelenting work to dismantle transnational criminal organizations," noted Acting Special Agent in Charge Cheyvoryea Gibson of the Salt Lake City FBI. "With strong partnerships in Idaho and around the world, the FBI stands firm in combatting those who attempt to defraud U.S. citizens and U.S. companies for their financial gain."

U.S. Attorney Josh Hurwit also commented on the convictions, saying, "My Office is committed to protecting Idaho consumers, businesses, and the public from fraud of all types. The convictions, sentences, and financial recovery in this case reflects our ability to work with our law enforcement partners to take down large-scale and long-term fraud enterprises that cross borders."

What do you think about this massive counterfeiting scam?

You Might Also Enjoy:

share this post
Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

Firm Avatar
Andrea A. Cartwright, Cpa

36 reviews

Rutherford Certified Public Accountant Andrea Cartwright

Andrea A. Cartwright is a Certified Public Accountant (CPA) practice based in Northern Jersey. She can assist you with your tax preparation, planning, bookkeeping, and accounting needs.
Service Lines
Tax Preparation
Tax Planning
Accounting
Bookkeeping
Business Consulting
Payroll & HR
Tax Problems
Tax Preparation
Virtual CFO
Industry Focus
C Suite
Dentists
Doctors and Medical Professionals
Educators
Fire & safety
Interior Design
Law enforcement
Fitness Industry
Realtor & Real Estate Professionals
Software Developers
Lawyers & Attorneys
Freelancer
Investors
View All View Less

Need help selecting a firm?

Tell us about your project and get introduced to the best accounting and tax firm for your needs.

See additional top-rated professionals near Rutherford, New Jersey
BARNES SALY & COMPANY, P.C.
Barnes Saly & Company, P.C. is a Certified Public Accounting firm with offices in Johnstown, Pennsylvania and Somerset, Pennsylvania. Barnes Saly & Company, P.C. can assist you with your tax return preparation, tax projections and planning needs. We also offer audit and assurance, part-time CFO service, payroll services and compliance, sales and use tax, financial reporting, bookkeeping, QuickBooks ProAdvisor support, start-up business, and business consulting.
Mira Mesa Tax Services
Mathieu is an Enrolled Agent and Tax Professional based in San Diego, CA 92126. I can assist you with your tax return preparation and planning needs.
TLC Tax Resolution - Jackson Sadeghi Company
3.9
TLC Tax Resolution, Jackson Sadeghi Company is a Tax Problem Resolution firm located in Rancho Mirage, California. We are a member of American Society of Tax Problem Solvers (ASTPS). Our expert Tax Resolution Professional, can assist you with your Tax Problem Resolution, Accounting, Tax Return Preparation and planning needs.

In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.

Join 60,000 who get our weekly newsletter. No spam.

Need help selecting a firm?

Use our specialized search engine and get matched to the best accounting and tax firm for your needs.

Related Posts

Latest Posts