16 Treasure Valley residents indicted for drug trafficking, money laundering after FBI raids
The men of the Babichenko family traveled from Boise to Asia to get the counterfeit phones they later sold in a multimillion-dollar scheme, prosecutors say.
Court documents filed Thursday reveal details about the investigation into the family’s alleged Idaho-based counterfeit sales and money laundering ring.
A grand jury indicted members of the Babichenko family — including Pavel Babichenko and brothers Piotr, Timofey and Gennady — and a handful of other Treasure Valley residents on 34 counts of fraud, money laundering and conspiracy. They were arrested Wednesday, as investigators raided their homes and businesses.
Federal prosecutors accuse them of smuggling fake Apple and Samsung phones and other devices into the U.S., repackaging the products in two local warehouses, then selling them online as new and genuine.
People who believe they bought the counterfeit devices can get more information and contact investigators at justice.gov/largecases.
Prosecutors say the scheme began more than a decade ago. “The scope of this conspiracy is vast,” they argued in a request to the court to keep some of the Babichenkos in custody until their trial.
They claimed the family operated more than 100 businesses to sell the fake devices to thousands of people. At least one business that sold cellphone cases and was named in the indictment still had active listings on Amazon as of Friday.
The Babichenkos didn’t order the fake devices to be shipped to Boise, prosecutors said. Instead, Pavel, Piotr and Timofey Babichenko traveled from Boise to China and Hong Kong to get their supply, which the indictment says they smuggled into the U.S.
FBI and Homeland Security agents bought the counterfeit Apple and Samsung devices more than 14 times through Amazon and eBay between November 2015 and December 2017, the document said.
It’s not the first time the Babichenkos and associates have been accused of wrongdoing in their mobile-phone businesses. They were sued twice a decade ago by phone carriers TracFone and Virgin Mobile.
But it was a confidential informant’s help that brought investigators face-to-face this time with Pavel Babichenko and David Bibikov.
The investigators made three “hand-to-hand, undercover purchases directly from (Babichenko and Bibikov) at the two Boise, Idaho warehouses,” the court document said. It didn’t say how many of the devices were bought in each transaction, but that they were “bulk” purchases.
The confidential informant said “he would then individually resell” the devices through Amazon and eBay, it said.
The Babichenkos are in custody until next week, as they await a hearing on whether they can be released on bond.
Prosecutors based their argument that the Babichenkos are a flight risk partly on their history of travel to Brazil. They own multiple apartment buildings in Brazil that were purchased with the ill-gotten gains, according to the indictment.
In the latest document, prosecutors said the men “are building eponymous condominiums with the proceeds of their counterfeit goods trafficking.”
The brothers had gone to Brazil at least three times in the past four years, prosecutors said.
In fact, they said, the Babichenkos just returned from a trip to Brazil on Monday, two days before the FBI descended upon their homes and businesses.