Jail sentence for scammers who fooled Apple into replacing fake iPhones with new ones

The tech giant suffered a loss of more than $2.5 million as a result of the scam, that unfolded in the United States.

Published on: Oct 5, 2024, 15:20:41 IST

By HT News Desk, New Delhi

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Two Chinese nationals living in the United States were sentenced earlier this week for duping Apple into replacing 6000 counterfeit iPhones with real models, resulting in a loss of more than ₹$2.5 million (approx. ₹21 crore) to the tech giant, the Department of Justice (DOJ) has announced.

FILE - The Apple logo is illuminated at a store in the city center in Munich, Germany, on Dec. 16, 2020.. (AP Photo/Matthias Schrader, File)

Sentenced on Wednesday, the two men are Haotian Sun (34) and Pengfei Xue (also 34). Both are residents of the Maryland state, living in Baltimore and Germantown respectively, a DOJ statement read.

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Also, as per the statement, Sun received 57 months in prison, three years of supervised release, and has been ordered to pay $1,072,200 in restitution to Apple and a forfeiture money judgment of $53,610.

On the other hand, Xue got 54 months in jail, three years of supervised release, and ordered to pay $397,800 in restitution to Apple and a forfeiture money judgment of $19,890.

The scam

Court documents and documents presented at the trial show the scam unfolded from May 2017 to September 2019. Under the scheme, the pair would receive shipments of inauthentic but genuine-looking iPhones from their co-conspirators who used to send these from Hong Kong. The delivery was made via UPS mailboxes throughout the Washington D.C., metropolitan area.

The fake iPhones, with spoofed IMEI numbers, were then submitted at Apple retail stores and other authorised Apple service providers, for ‘repair.’ The IMEI numbers were linked to real customers' iPhones that were still under warranty and in turn, this led to the Tim Cook-led company being tricked into substituting fake devices with genuine ones.

However, a tip-off from an Apple investigator alerted law enforcement and the conspiracy was busted.

Sun and Xue were convicted in February after a five-day jury trial.

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