According to the feds, two men duped Apple into sending thousands of iPhones worth $2.5 million to the company by asking them to fix counterfeit iPhones.
Haotian Sun, a Chinese national living in Baltimore, and Pengfei Xue, who immigrated from China and took up residence in Germantown, MD, managed to trick Apple into thinking the iPhones were genuine in what the feds called a “sophisticated” scheme. Between 2017 and 2019, the Justice Department said Thursday.
Sun, 33, was sentenced to 57 months in prison and ordered to pay more than $1 million in compensation to Apple, while Zou, 33, was sentenced to 54 months and ordered to pay fines of $397,800 to the company. Asked to pay dollars.
Both men and their co-conspirators were convicted of sending 6,000 counterfeit iPhones, which were shipped to them from Hong Kong to Apple with fake serial numbers, to Apple retail stores and other licensed service providers.
He was arrested after an Apple tipster tipped off the feds, According to an affidavit from Postal Inspector Stephen Cohen.
Law enforcement managed to intercept the packages and confirm that thousands of counterfeit phones were being shipped from China.
Apple offers a one-year warranty to iPhone users who return their devices and get it repaired. But Sun and Zou shipped phones that were either out of warranty or contained counterfeit parts.
According to Cohen, Apple “incorrectly” believed that the phones were under genuine warranty. The company would often replace dozens of fraudulently returned counterfeit phones in a single shipment.
The two men also used different aliases and opened new mailboxes to cover their tracks so that it would look like Apple would not be receiving phones from the same person.
When federal agents began intercepting the packages, they were able to trace Sun and Zou’s addresses.
Agents did not immediately arrest either man. Instead, according to Cohen, he wrote down the serial numbers of each phone in each intercepted package and then “allowed the shipments to be delivered to their intended recipients”.
After this the government gave serial numbers to Apple. In return the company provided Apple with the names, addresses, and email addresses that were used to process returns.
According to investigators, Sun submitted more than 1,000 repair requests using multiple email addresses – some of which were registered in his real name.
Police also searched trash bins outside the two men’s homes and investigated to determine when they brought the intercepted packages to Apple stores.
