The South China Morning Post has reported on the arrest of two men in Tuen Mun, a Hong Kong district. Their repair shop was seemingly a cover for the distribution of counterfeit smartphone parts.
The operation posed as a repair shop servicing international customers from locations including the US, UK and Australia. During the raid on the premises, around 100 damaged phones were discovered, set to receive counterfeit components and shipped back to unsuspecting owners abroad.
Also in the warehouse, which covers up to 5,000 square feet, were 3,900 counterfeits smartphones and parts, including branded iPhone and Samsung devices. Phone screens, enclosures, and machinery involved in the repairs were also seized.
Customs officers launched the investigation after complaints from a trademark owner. The commander of customs’ intellectual property transnational investigation division, Szeto Chi-fai, highlighted the use of social media and a company website to evade the eye of customs, with Australia, the US and the UK primary targets for the operation. Initial investigations suggest second-hand phone dealers were a major part of the business, and could source devices at a third of their normal cost.
Repairs using non-standard, cheap components can introduce vulnerabilities into a device. The owner would likely find it hard to spot when such a dodgy repair has taken place, with the potential dangers ranging from poor performance to exploding or leaking batteries.
The two male suspects have been released on bail, while the locals carrying out the repairs were not arrested.
The maximum penalty for possessing or selling counterfeit goods in Hong Kong is five years in jail and a HK$500,000 fine. The investigation continues.