Sixteen people accused of drug trafficking, fraud, money laundering and trafficking in counterfeit goods have been indicted after a large-scale Organized Crime and Drug Enforcement Task Force investigation, the U.S. Attorney’s Office announced Thursday.
The announcement came after multiple federal and local agencies, including the FBI, raided homes and businesses throughout Ada County on Wednesday.
The investigation — which involved local, state, federal and even foreign law enforcement agencies — began a little more than four years ago, U.S. Attorney Bart Davis told the Statesman.
The indictment alleges that 10 people operated a multimillion-dollar scheme to sell counterfeit phones and accessories. They bought the fake goods in bulk from manufacturers in Hong Kong and China, repackaged them in the Treasure Valley, and then individually resold them on Amazon and eBay to consumers as new and genuine. It also alleges that the defendants laundered millions of dollars from the scheme.
With the money, prosecutors say, they bought nine vehicles, six Ada County residential or commercial properties, and foreign property that included seven residential apartment buildings in Brazil.
The indictment says they “obtained and controlled” at least $10 million in property that was transferred, used, shared or otherwise can’t be recovered. They also had a total of 54 bank accounts; prosecutors are including bank accounts held by Morning Star Church in Boise on that list. The church’s phone went unanswered Wednesday.
A grand jury returned 34 counts charging the 10 people with conspiracy to commit wire fraud, mail fraud, conspiracy to traffic in counterfeit trademarked goods, and money laundering conspiracy:
- Pavel Babichenko
- Gennady Babichenko
“Counterfeited products degrade the goodwill of trademark holders and pose a serious safety risk to the community,” Davis said.
Davis said it’s likely there are more than 25,000 victims who purchased the counterfeit merchandise. The 12 police raids on Wednesday were eight residences, two warehouses, one business location and one church, he said.
Authorities believed the defendants laundered millions of dollars through the scheme, which ran from before 2008 through earlier this month, Davis said.
If convicted, the defendants could face up to 20 years in prison and a $250,000 fine on the money laundering, wire fraud and mail fraud counts. They face up to 10 years in prison and a $5 million fine on the counterfeit trademark goods trafficking counts.
Homeland Security Investigations Assistant Special Agent in Charge William Puff said the sale of counterfeit merchandise funnels “millions of dollars to criminal organizations so they can continue their criminal enterprise.”
All 10 of the defendants were scheduled for arraignment on Thursday. The Idaho U.S. Attorney’s Office filed motions asking that Pavel, Piotr, Timofey and Gennady Babichenko be held without bond until trial, stating that the four men were a flight risk.
In separate cases stemming from the investigation, the grand jury also returned six indictments charging six people with drug violations.
Davis said Thursday that “the only known connection between these two investigations and prosecutions is that both are being announced today.” He reiterated that point several times when asked to discuss how the cases both stemmed from the same investigation.
Earl Camp, FBI assistant special agent in charge, spoke Thursday about how the standard drug investigation led to the counterfeit product investigation.
“These groups represent a threat to our national and economic security,” Camp said. “Whether they sit in New York City, Los Angeles or Boise, Idaho, I have no doubt this case has national implications.
“What started as a traditional drug investigation identified a more complex scheme to defraud the American people and American companies with counterfeit electronics.”
Those facing drug charges, and the allegations against them, are:
- Tetyana Vasilevna Andriychuk, distributing heroin
- Jeffrey S. Davis, distributing methamphetamine
- Pavel Matlashevsky, distributing heroin
- Alexandr Stricharskiy, distributing methamphetamine
- Sergey Zagorodny, distributing cocaine and illegally selling a firearm
- Vadim N. Dmitruk, possessing heroin with the intent to distribute
Dmitruk’s indictment alleges that on July 26 he possessed and intended to distribute more than 100 grams of heroin. The authorities seized $6,625 from him as well as a 2010 Mercedes.
Zagorodny’s indictment alleges that he sold cocaine in October 2017 and illegally sold a firearm in 2016.
Jeffrey Davis’ indictment alleges that he sold at least 5 grams of methamphetamine in July 2016.
All but four of the people charged are U.S. citizens, Bart Davis said.
Maximum prison sentences for the defendants in the drug cases range from 20 years to life.
The investigation leading to their indictment included people who were charged and sentenced in the past year with drug violations: James Peirsol, Blake Anthony Vanhoff, David Lon Rose and David Duane Gudgel, who pleaded guilty to distributing methamphetamine and were sentenced to anywhere from two to more than 17 years in prison.