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Massive Treasure Valley counterfeit cellphones trial ends in hung jury, no convictions

The ten-week trial of a local family accused of running an international multi-million dollar counterfeit operation ended last week with a jury deadlocked.
Credit: Joe Parris/KTVB
Officials with the FBI, Homeland Security and U.S. Postal Inspectors have been going through homes and businesses across Ada County during a FBI operation on Wednesday, Aug. 22, 2018. (Photo: Joe Parris/KTVB)

BOISE, Idaho — The ten-week trial of a Treasure Valley family accused of running an international multi-million dollar counterfeit cellphone operation ended last week with a jury deadlocked. 

None of the eight defendants were convicted of any of the charges against them, which ranged from wire fraud to conspiracy to trafficking in counterfeit goods. One member of the family, Natalya Babichenko, was fully acquitted, while the other defendants - Pavel Babichenko, Piotr Babichenko, Timofey Babichenko, Kristina Babichenko, Anna Iyerusalimets, Mikhail Iyerusalimets, and David Bibikov - saw not-guilty verdicts for a smattering of their charges and a declaration that jurors could not reach a consensus on others. 

A ninth relative, Gennady Babichenko - who prosecutors said financed the illegal scheme but was not involved in day-to-day operations - had all charges against him dropped in August; money laundering charges against some of the remaining defendants were dismissed at the same time. 

The trial's conclusion acted as a stunning repudiation of prosecutors' claims that the Babichenko family functioned as a crime empire for more than a decade, opening dozens of shell LLCs to sell fake Samsung and Apple cellphones, chargers, smartwatches and other electronics to thousands of unwitting customers via Amazon and eBay. 

The federal investigation into the family's dealings began in the early 2000's and involved surveillance, undercover buys, and inside informants ahead of a massive 2018 raid at the defendants' homes, businesses, and the warehouses in Meridian where prosecutors say they did the bulk of the packaging and shipping for the counterfeit operation. 

Lawyers for the defendants said their clients were hard-working entrepreneurs and devoted family men and women who did nothing illegal, but had fallen into the crosshairs of overzealous federal investigators suspicious of their "high-volume" sales. Attorneys also argued that investigators had lost, mislabeled, or destroyed some of the evidence in the case before it reached trial. 

Jurors began their deliberations on Aug. 27, and informed the judge they could not come to a verdict on all the counts the evening of Sept. 2. 

The law requires jurors to reach a unanimous decision about defendants' guilt or innocence. It is unknown how many members of the jury wanted to convict versus acquit for the counts on which they deadlocked. 

The hung jury means prosecutors can elect to move forward to another trial on the charges on which no verdict was reached. A hearing on the matter is set for Sept. 14.

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