Prosecutors: Couple made $4 million selling stolen smart phones

A customer shows her new iPhone 5 at the Apple store in Hong Kong on Sept. 21, 2012. (AP Photo/Kin Cheung)

SACRAMENTO, Calif. » A California couple were arraigned Tuesday on charges they collected hundreds of stolen smartphones from across the nation, then sold them in Hong Kong for as much as $2,000 each.

Shou Lin Wen, 39, and his wife, Yuting Tan, 27, made nearly $4 million from the scheme in just eight months, the state attorney general said.

Prosecutors say the couple and unnamed co-conspirators recruited people from homeless shelters as far away as North Carolina to sign up for multiyear service contracts that let them buy multiple smartphones at a discount. The charges allege the buyers had no intention of paying the service contracts and were paid a small fee for their help.

Prosecutors say middlemen, who have not been charged, shipped the phones to the Sacramento couple.

They were arraigned in Sacramento County Superior Court on eight felony counts of money laundering, grand theft, possession of stolen property and conspiracy. They remained jailed with bail set at $1 million each.

Neither entered a plea. Their attorney, Patricia Campi, said she had just received the case and couldn't comment.

The arrests resulted from a six-month, multi-state investigation that tracked stolen phones to California, then on to Hong Kong.

The couple were arrested March 6 during an undercover operation by special agents from the attorney general's 2-year-old eCrime Unit.

The agents met the couple in parking lot, where they offered to sell the couple 408 smartphones. Agents say the couple produced $60,600 in cash to buy 163 of the phones.