Man sentenced to 5-year term in iPhone fraud
A Seattle-area man who made millions illegally shipping Apple products to the Middle East has been sentenced to five years in prison.
Maziar Rezakhani already lost his high-end penthouse and Ferrari collection for defrauding Apple and the Internal Revenue Service. This week, he learned his sentence.
Rezakhani, 27, admitted to fraud related to a multimillion-dollar iPhone export operation. Pleading guilty in August, Rezakhani had been under investigation for nearly two years before federal agents came calling in October 2015.
By then, though, the damage was done. Prosecutors say the young millionaire’s fraud helped break Foundation Bank of Bellevue, Wash., which loaned Rezakhani some of the millions he blew on Italian sports cars and his apartment.
Investigators determined he had shipped thousands of Apple products to Dubai and elsewhere. By the prosecution’s account, Rezakhani tried to steal $700,000 worth of iPhones by claiming they were lost in the mail. He then obtained a $4 million loan on false pretenses
and filed a false $5 million insurance claim.
In sentencing Rezakhani, U.S. District Judge James Robart also imposed a five-year period of court supervision to begin after Rezakhani's release.
Rezakhani began reselling Apple products while a student at the University of Washington, dealing with distributors in the United States and Middle East.
From 2009 until his arrest, prosecutors said, he moved millions of dollars in Apple products and claimed a seven-figure annual income. He dodged Washington state sales taxes by buying iPhones in Portland and shipping them to the Middle East.
Rezakhani was already under investigation by January 2014, when a Homeland Security agent watching his parents’ home in the Seattle suburbs saw FedEx pick up a shipment bound for Singapore.
At the same time, Rezakhani was opening large lines of credit. He provided false tax returns and bank statements to obtain the loans, and owed $2.8 million on one when the FBI interrupted his operation.
Rezakhani provided Foundation Bank with a purported agreement with Apple authorizing his company to resell its products. The fake document helped him secure a $4 million loan, according to prosecutors.
In March 2015, Rezakhani moved into a $26,265-a-month penthouse.
Rezakhani’s theft from Foundation Bank helped force the bank’s sale in 2016 and caused many people to lose their jobs, government lawyers said.
Twice Rezakhani claimed shipments of iPhones had been stolen in transit. Investigators said they were attempts to defraud FedEx and UPS.
Rezakhani told FedEx investigators that a shipment of 1,280 phones had been replaced with kitchen tiles. Several of the cartons were found packed with anti-Apple leaflets naming Foxconn, a Chinese electronics manufacturer notable for its poor treatment of workers.
Surveillance video showed Rezakhani buying the tiles days before he bought the missing phones.
He made similar claims in July 2015, asserting that a $5.6 million shipment had been replaced with stone blocks. Rezakhani bought the blocks at a building supply store days before sending the shipment.
In October, investigators raided Rezakhani’s penthouse apartment and his parents’ home. They seized financial documents and electronics, as well as $114,000 in cash.
Rezakhani was arrested in December. He ultimately pleaded guilty to mail fraud, bank fraud and filing a false tax return.
Doing so, he admitted faking the shipping losses, lying to obtain the $4 million Foundation Bank loan and hiding income from the IRS. Rezakhani has agreed to pay back taxes and to repay Foundation Bank $3.1 million. He also agreed to pay $349,000 to Apple and two other companies he swindled. That restitution comes on top of $3.3 million that he has agreed to forfeit to the government.