A Dublin-based Chinese businessman has been accused of money laundering connected to an international €9.7 million "zombie" iPhone fraud.
Chengwen Guo, 41, of Ivy Exchange, Parnell Street, Dublin 1, was arrested at his home on Wednesday following a three-year investigation by the Garda National Bureau of Criminal Investigation into an illegal counterfeit Apple phone trade.
He was taken to Kevin Street Garda station in the city centre and charged with three offences under section seven of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 for possessing crime proceeds totalling €170,460, following searches at three locations in Dublin in January 2022.
The offence carries a maximum 14-year sentence.
The father of four, who was believed to be running a chain of phone shops since moving to Ireland in 2012, allegedly had €143,245 at his home, €20,700 at Murray Mobile, 15 Main Street, Dundrum, D14, and €6,515 in a 2019-reg Audi Q2 car at Shanowen Road, D9.
The court heard fake Chinese Apple phones were dispatched to Ireland and swapped for genuine iPhones sent to China.
He was refused bail when he appeared before Judge David McHugh on Saturday at Dublin District Court, which heard gardaí believed he was a "central figure in the complex deception that was undertaken to defraud Apple".
Detective Garda Conor Cadogan said Mr Guo "made no reply" to the charges, and the officer objected to bail, citing flight risk and witness interference fears.
The contested bail hearing was told that the GNBCI probe opened in December 2021 following a report from tech giant Apple about product warranty fraud.
"It was suspected that an international organised crime gang (OCG) are involved in procuring counterfeit products and sending them to members of the OCG in Ireland for processing," Detective Garda Cadogan said.
He claimed that in July 2021, Customs officers intercepted a package "full with counterfeit items and Apple products" destined for the Murray Mobile phone company at 15 Main Street Dundrum.
The court heard a different name was on the package, but it also had the same address and mobile phone number as the accused.
Gardaí believed the accused controlled eight Murray Mobile stores in Dublin and Kildare.
10 searches under warrant were carried out on January 10, 2022, and gardaí found the cash at the three locations named in court and on the charges.
Detective Garda Cadogan said the investigation team froze 14 bank accounts connected to Murray Mobile, the accused, and his wife. He told Judge McHugh there was a total of €168,902 in them.
The officer explained that the probe focused on genuine and unique IMEI (International Mobile Equipment Identity) numbers applied to counterfeit Apple phones.
Known as "zombie phones", the court heard, they were allegedly supplied to Mr Guo and subsequently used to defraud Apple.
This activity involved the phones being brought to a specific phone repair shop.
Some 10,685 were submitted for repair from 2019 to 2021, and 9,761 of them have been allegedly confirmed to be counterfeit zombie phones.
It was estimated that the accused and his associates made approximately €9.7 million from executing this fraud.
Detective Garda Cadogan said he was satisfied that it involved members of the international gang in China and Ireland.
The court heard that it was believed the fake devices were shipped to Ireland, where genuine IMEI numbers were applied to them.
The accused allegedly brought them to the phone repair shop to be processed, and he received genuine replacement iPhones, which were sent to Asia and sold to the benefit of the organised crime gang.
Mr Guo's phone was seized in January 2021 and allegedly contained evidence that he was a "central figure in the complex deception that was undertaken to defraud Apple".
The detective believed the accused was a "major flight risk", adding that he was a person of considerable means with connections. He contended that it would be easy for Mr Guo to flee the jurisdiction to evade justice if granted bail.
Judge McHugh heard that the investigation team would recommend that the Director of Public Prosecutions bring further serious charges under organised crime legislation and for trademark, money laundering and theft offences.
The court heard that Mr Guo had a Chinese passport, and Ireland did not have an extradition agreement with China.
The detective said 57 witness statements had been taken, and he feared there could be interference with witnesses, which could jeopardise the trial process.
Questioned by defence solicitor Conor Ruane, the officer agreed that Mr Guo was arrested on Wednesday at his home, which had been searched in January 2022.
Mr Ruane stressed that his client continued to work and live here, despite knowing of the ongoing investigation.
Family members were in court. Mr Ruane said his client's wife was an Irish citizen, and his ties to the country were solid.
The detective said the businessman travelled to China numerous times a year and had family and friends there, but agreed with the solicitor that the majority of his accounts have now been frozen.
Pleading for bail, Mr Ruane said his client would surrender his passport, which is currently in the UK embassy, because he had applied for a visa to visit his adult daughter, who is studying in the UK.
The detective said he had recently learned about that, and it strengthened the case to object to bail. Furthermore, he did not know if gardaí had jurisdiction to seize the passport from the embassy.
The defence solicitor said there was a €9,000 bail offer from his client's wife, but the Garda would not agree to any terms being set.
Mr Ruane said the accused has the presumption of innocence, the wait for further charges would increase his client's time in custody more than normal, and he was entitled to bail with terms.
The court heard he spoke very good English, and he also had the assistance of an interpreter. However, he did not address the court or indicate a plea.
Judge McHugh said he was satisfied Mr Guo was a flight risk and refused bail. The accused was remanded in custody to appear at Cloverhill District Court on Wednesday.
