Meridian man says he’ll pay $9.5M to Apple, Samsung for selling fake devices on Amazon

A Meridian man admitted Wednesday to selling more than $9.5 million of fake Apple and Samsung phones on Amazon.

Artur Pupko told a federal judge that he knowingly sold counterfeit goods and believes he would be found guilty if he went to trial.

Pupko is one of 10 defendants from the Boise area who were indicted in August 2018 on more than 30 charges in an alleged counterfeit phone trafficking scheme.

Pupko is the only defendant to agree to plead guilty in the case. The others pleaded not guilty and are set to go to trial in October 2020.

Pupko told U.S. Magistrate Judge Candy W. Dale on Wednesday morning a brief version of his story, as more than 20 people listened from the courtroom.

Pupko started working for Midstar LLC in 2014, at age 22. His boss was Paul Babichenko — a man accused of being a central figure in the alleged scheme. It was a simple job testing cellphones, Pupko said.

But he was given “an opportunity” to sell smartphones on the side and make extra money, he told Dale.

“And I sold a few phones online, on Amazon, and I realized that ... I could make a living off of this,” he said.

After selling just 10 phones, he made close to his weekly wage, he said.

Prosecutors said Wednesday that Pupko is believed to have sold between $9.5 million and $25 million worth of fake phones, smart watches and other goods.

“At first, I didn’t know much at all” about the origins of those devices, Pupko said. “But as I worked there, I clearly could see that these phones and boxes and whatnot — they were not real, not from the manufacturer, and they were counterfeit.”

He said he wants to plead guilty to three charges of trafficking in counterfeit goods. He agreed to pay restitution to Apple and Samsung of $9.5 million.

Dale accepted his plea.

Pupko will be sentenced at a later date. Prosecutors agreed to drop several charges against him, but the remaining three charges carry a maximum of 10 years in prison and $2 million fine, the judge told Pupko.

If convicted, Pupko’s codefendants could face up to 20 years in prison and a $250,000 fine on money laundering, wire fraud and mail fraud counts; and up to 10 years in prison and a $5 million fine on counterfeit trademark goods trafficking counts.

Prosecutors say the group made millions of dollars, then used the money to buy apartment buildings in Brazil, houses in the Treasure Valley, jewelry and other property.

Caught up in the alleged scheme was a local church, Morning Star Christian Church, attended by many families who moved to Idaho from former Soviet countries. Some of the accused held prominent leadership roles in the church, but congregants told the Statesman after the arrests that they believe the defendants are innocent.

Meanwhile, Paul Babichenko wants to resume selling phones and accessories while he awaits trial. Babichenko filed a permit with the city of Boise this month to sell phones and accessories out of a building on Cole Road.

Babichenko declined to talk with the Statesman about selling phones during his pretrial release, and his attorney did not respond to a call for comment. It is unclear whether the business would violate any terms of his release.

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