Published on: October 4, 2024
Two Chinese nationals have been sentenced to prison for orchestrating a scheme that defrauded Apple of more than $2.5 million. Court documents reveal that from June 2017 to December 2019, Haotian Sun and Pengfei Xue executed a scheme involving the return of counterfeit iPhones to Apple for repairs, deceiving the company into replacing them with genuine devices.
The pair received shipments of counterfeit iPhones from Hong Kong, delivered to various mailboxes in the Washington, D.C. area. They then returned these fake devices, complete with spoofed serial and IMEI numbers, either to Apple retail locations, authorized service providers, or through the mail.
The counterfeit devices were brought to the Apple Store for repairs, and when technicians were unable to fix them, they replaced them with new iPhones.
“They returned phones under the false pretense that the suspected counterfeit phones were under warranty and should be replaced due to malfunction or other reason,” according to the court documents.
“Apple, wrongly believing that the person submitting the replacement request was entitled to a replacement, responded by providing a new iPhone either in person at an Apple retail store or by shipping a new iPhone to addresses provided by the conspirators,” the documents read.
“Members of the conspiracy submitted more than 6,000 inauthentic phones to Apple during the conspiracy, causing a loss of more than $2.5 million,” the Department of Justice said in announcing the sentencing.
They will each serve nearly five years in prison and must collectively pay $1.5 million for their involvement in scamming Apple out of millions in iPhones.
Sun, a 34-year-old Chinese citizen residing in Baltimore, Maryland, received a sentence of 57 months in prison, followed by 3 years of supervised release. He was also ordered to pay $1,072,200 in restitution to Apple, along with a forfeiture judgment of $53,610.
The second perpetrator, Xue, also 34 and a Chinese citizen residing in Germantown, Maryland, received a 54-month prison sentence and will undergo 3 years of supervised release. He has been ordered to pay $397,800 in restitution to Apple, in addition to a money judgment of $19,890.