Fake Siemens devices sold in scam

Yangpu district police have arrested eight people for selling more than 30 million yuan ($4.9 million) worth of counterfeit Siemens factory controllers to more than 120 companies around the country, police announced Friday.

Two of the suspects, surnamed Xing and Wang, owned Shanghai Zhaoshuo, a company that bought cheap electronic controllers from factories in Shenzhen, Guangdong Province and then resold them under the Siemens Group brand name without the German electronics conglomerate's knowledge or permission, according to a press release from the Yangpu District Public Security Bureau.

Xing was a former salesman who used to sell Siemens factory controllers. Police said he earned more than 300,000 yuan a year in his previous job.

He later admitted to police that he had seen phony brand products while working as a salesman and figured he could make a lot of money selling them himself.

He and Wang hired workers to repackage the devices so they carried the Siemens logo. The logo was also featured on the devices' warranty and instruction cards, police said. They even printed the telephone number of Siemens' official warranty line on the packaging.

Despite the lower quality of the products, Shanghai Zhaoshuo sold them at the same prices that Siemens did. It had customers in Zhejiang, Jiangsu, Sichuan, Hebei and Hunan provinces.

In March, Siemens' subsidiary in Shanghai began to receive complaints from factories about frequent failures in their new Siemens controllers, police said.

The engineers that the company sent to investigate the complaints found that all of their problems stemmed from faulty factory control and valve devices. Although the devices carried the Siemens logo, they were clearly of lower quality than the genuine products.

After receiving a report from Siemens, Yangpu district police determined that the products were all sourced from Shanghai Zhaoshuo.

On July 25, police raided three criminal enterprises for selling the phony products and confiscated 600 counterfeit brand devices.