Large-scale fraud: Millionaire fraud committed by two Chinese citizens on Apple

The US Department of Justice has found two Chinese nationals guilty of running a sophisticated iPhone repair scam that defrauded Apple of millions of dollars.

Scammers sent fake iPhones to the company for repairs and received original iPhones as replacements. Between 2017 and 2019 They managed to replace more than 5,000 fake iPhones with real devices, causing Apple a loss of more than $3 million.

 

The Master iPhone Scam: Operation Details

Haotian Sun, a resident of Baltimore, Maryland, and Pengfei Xue, a resident of Germantown, Maryland, both 33-year-old Chinese citizens, carried out this scam between May 2017 and September 2019.

According to the U.S. Attorney’s Office for the District of Columbia Scammers received fake iPhones from Hong Kong in UPS mailboxes throughout the Washington DC metropolitan area. These counterfeit devices were then sent to Apple for repairs.

Scammers have forged serial numbers and/or IMEI numbers on counterfeit iPhones and likely shipped the devices to Apple in an inoperable condition. Not only did this allow them to get a free replacement under warranty, but it also prevented discovery. Even if the repair technicians noticed something suspicious about the internals, they probably approved the replacement because the serial numbers and IMEI looked real.

The two Chinese nationals sent counterfeit iPhones to various Apple retail stores and Apple authorized service providers for repair. They used multiple pseudonyms during the plan and likely received help from other people. In total, They swapped more than 5,000 counterfeit phones for genuine devices and defrauded the company of iPhones worth more than $3 million.

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Sun and Xue were arrested on December 5, 2019. They now face a statutory maximum sentence of 20 years in prison. The sentencing hearing is scheduled for June 21, 2024.

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