Bellevue millionaire fraud moved from penthouse to big house UW grad, 27, lied to Apple, IRS while making millions quietly shipping iPhones to Middle East

Bellevue resident Maziar Rezakhani made millions buying Apple products and shipping them overseas. He's now looking at federal prison time for a series of frauds that saw him bilk Apple, his bankers and the IRS. less Bellevue resident Maziar Rezakhani made millions buying Apple products and shipping them overseas. He's now looking at federal prison time for a series of frauds that saw him bilk Apple, his bankers and the ... more Image 1 of / 18 Caption Close Bellevue millionaire fraud moved from penthouse to big house 1 / 18 Back to Gallery

It’s a long way down from The Bravern penthouse in downtown Bellevue to the federal jail in SeaTac. Maziar Rezakhani managed to take it slow.

Rezakhani, now 27, had been under investigation for nearly two years before federal agents came calling in October. Agents and, later, federal prosecutors claimed he’d converted his dubious, multi-million dollar iPhone exporting operation into an out-and-out fraud.

By the time he pleaded guilty last month, Rezakhani had lost the penthouse and the Ferraris. He still had his freedom, though, until Wednesday, when he was booked into Federal Detention Center SeaTac for walking out of his home without permission.

Now, the University of Washington grad-turned-millionaire faces years in federal prison for frauds committed while shipping thousands of Apple products to Dubai and elsewhere.

Rezakhani, a longtime Western Washington resident, began reselling Apple products at 18 while studying at UW. He was a middle man, reselling iPhones to distributors in the United States and Middle East.

From 2009 to 2012, he moved millions of dollars in Apple products. The operation was lucrative – he leased luxury apartments, drove expensive cars and claimed to have a seven-figure annual income.

Investigators claim Rezakhani wasn’t paying taxes, and he wasn’t exactly truthful about what he was exporting. Not only was Rezakhani failing to pay the IRS, he was dodging Washington state sales taxes by buying iPhones in Portland.

According to investigators’ statements, Rezakahani and a colleague used a group of “runners” in Portland to buy thousands of iPhones. They flew south every few days to collect the phones and buy more from an authorized Apple retailer. Rezakhani then repacked the iPhones at his parents’ home and shipped them to the Middle East.

Rezakhani formed or partnered with at least three companies to manage the effort. One, NeoAce, was described as the sole purchaser for a Dubai reseller; a Washington firm, GTE Holdings, transferred about $50 million to and from NeoAce between 2011 and 2013.

At the same time, Rezakhani was opening large lines of credit. He provided false income tax returns and bank statements to obtain the loans; he owed $2.8 million on one when the FBI interrupted.

“Mr. Rezakhani has repeatedly lied to obtain money and property,” Assistant U.S. Attorney Brian Werner said in court papers.

To secure one loan, Rezakhani provided Foundation Bank with what purported to be an agreement with Apple authorizing NeoAce to resell Apple products. The fake agreement was meant to legitimize Rezakhani’s business and helped him secure a $4 million loan.

Rezakhani was already under investigation by January 2014, when a Homeland Security Investigations agent watching his parents’ home saw FedEx pick up a shipment of iPhones bound for Singapore. Investigators placed a camera outside the Lynnwood home and collected security data from the Bravern – a luxury apartment building near Bellevue Square – to track Rezakhani.

As the investigation rolled forward, Rezakhani continued to rake it in.

In March 2015, he moved into the Bravern’s penthouse apartment, paying $26,265 a month in rent. Rezakhani appears to have also bought a house in Medina, and collected two Ferraris, a Mercedes and a Range Rover. Each of the vehicles carried a personalized license plate reading “MAZAIR” and a number.

Investigators believe Rezakhani in 2012 deposited $51 million in one bank account, withdrawing $24 million. The following year he deposited $52 million and withdrew $22 million.

It was a life many convicts would envy. Rezakhani had been convicted of a felony property offense in 2008. Investigators say that didn’t stop him from firing a pistol at a Bellevue gun range.

A friend of Rezakhani posted the video on social media, which proved problematic for Rezakhani due to his criminal history. He regained his gun rights in August 2015, more than a year after his trip to the range.

According to federal prosecutors, Rezakhani was grossly under-reporting his income. In 2012, he told the IRS his total annual income was $2,000; on loan applications in 2013 he claimed annual incomes of $37.7 million and $69.5 million.

Twice Rezakhani complained that shipments of iPhones had been stolen in transit. Investigators came to believe that Rezakhani was lying both times in attempts to defraud FedEx and UPS.

Rezakhani told FedEx investigators that a shipment of 1,280 iPhone 5s phones had been replaced with kitchen tiles. Several of the cartons were found packed with anti-Apple leaflets reading “iSlave” and depicting workers hanged with Apple’s signature earbuds. The leaflets also were printed with the name Foxconn, a Chinese electronics manufacturer notable for its poor treatment of workers.

Surveillance video taken at hardware stores around the Eastside showed Rezakhani buying the tiles days before he bought the missing phones. Moreover, the iPhones were spread between multiple shipments from different locations, making it impossible for a distribution-center thief to fake the order.

Despite the flaws in his claim, Rezakhani convinced his creditors to repay him $340,000 at Apple’s expense.

Rezakhani 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 Bellevue building supply store days before sending the shipment.

That month he also told Lynnwood police 625 iPhones had been stolen from his parents’ home. Rezakhani didn’t know it at the time, but investigators were watching the home with surveillance cameras and knew it hadn’t been burgled.

In October, investigators raided Rezakhani’s penthouse apartment as well as his parents’ home. They seized financial documents and electronics, as well as $114,000 in cash.

Rezakhani was arrested following those searches and indicted in December on three fraud-related counts connected to statements Rezakhani made to secure loans. Prosecutors followed that up in March with a request to seize gift cards and cash uncovered during the investigation.

Even facing years in prison, Rezakhani was still trying to make deals, according to court papers. He sought special permission from the court to meet with a Federal Aviation Administration engineer with whom he hoped to launch a new venture.

In August, Rezakhani 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, saving himself $355,000 in the process.

Rezakhani has agreed to pay those 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 he garnered through the fraud that he has agreed to forfeit to the government.

Werner described Rezakhani as a “danger to the community.” Prosecutors repeatedly sought to have Rezakhani jailed in the months since his initial arrest.

Though he remained under house arrest for much of the time, he didn’t face significant confinement until Wednesday, when he appeared in court to answer allegations that he violated conditions of his pre-sentence release.

Rezakhani was found to have left his home without permission and ordered jailed until his sentencing hearing, presently scheduled for Oct. 31 before U.S. District Judge James Robart at the federal courthouse in Seattle.

Seattlepi.com reporter Levi Pulkkinen can be reached at 206-448-8348 or levipulkkinen@seattlepi.com. Follow Levi on Twitter at twitter.com/levipulk.