Two Chinese nationals convicted for sending thousands of fake iPhones to Apple for replacement

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File photo.

22nd February 2024 – (New York) Two Chinese nationals, Haotian Sun and Pengfei Xue, both 33 years old and residents of Maryland, face a maximum sentence of 20 years in prison after being found guilty of mail fraud and conspiracy to commit mail fraud. The conviction came following a trial in the District of Columbia, as announced by the Attorney’s Office.

The Department of Justice revealed that Sun and Xue, along with their accomplices, sent over 5,000 counterfeit iPhones to Apple between May 2017 and September 2019. Their intention was to exploit Apple’s one-year warranty program, which allows customers to exchange malfunctioning devices for new ones.

The scheme involved submitting “inauthentic” iPhones to Apple, with the aim of causing a loss of more than $3 million to the tech giant. The counterfeit devices were initially imported from Hong Kong using UPS mailboxes in the Washington, D.C. metropolitan area. The criminals then shipped the fake iPhones to Apple retail stores and Authorised Resellers, utilising falsified serial numbers and IMEI numbers.

The Department of Justice stated, “The defendants used counterfeit iPhones to obtain genuine replacement iPhones from Apple by means of fraud and deception.” The illicit operation was eventually uncovered, and in December 2019, U.S. postal inspectors arrested Sun and Xue after they were found to have opened eight UPS Store mailboxes using fraudulent identification.

The convicted individuals are scheduled to be sentenced on June 21st, and their prison terms will be determined based on the U.S. Sentencing Guidelines and other statutory factors, with a maximum possible sentence of 20 years each.

Apple, the target of the fraudulent scheme, has not yet provided a comment on the matter.

This type of scam, involving the submission of counterfeit iPhones for replacement, is not new. In 2019, multiple individuals in California were indicted for a similar scheme, defrauding Apple by returning nearly 10,000 counterfeit iPhones and iPads in exchange for genuine devices.