Duo face 20 years in prison over counterfeit iPhone scam
- Reference: 1708540206
- News link: https://www.theregister.co.uk/2024/02/21/counterfeit_iphone_scam/
- Source link:
This is according to the Attorney's Office for the District of Columbia following the decision by a federal jury to convict Maryland residents Haotian Sun, 33, and Pengfei Xue, also 33, of mail fraud and conspiracy to commit mail fraud.
The Department of Justice says the pair submitted upwards of 5,000 "inauthentic" iPhones to the tech giant "intending to cause a loss of more than $3 million to Apple" between May 2017 and September 2019.
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Apple runs a one-year warranty scheme on its iPhones and offers to exchange malfunctioning products for shiny new ones. It was this scheme the criminals tried to defraud.
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In a [4]statement , the DoJ confirmed that along with their unnamed co-conspirators, the pair were sent "counterfeit iPhones to Apple for repair to get Apple to exchange them with genuine replacement iPhones."
The counterfeit phones were originally imported from Hong Kong via UPS mailboxes in the DC Metropolitan area. The dodgy devices were then shipped onto Apple retail stores or Authorized Resellers with spoofed serial numbers and/or IMEI numbers.
[5]Fake Apple rep amasses 620,000+ stolen iCloud pics, vids in hunt for images of nude women to trade
[6]Phones' facial recog tech 'fooled' by low-res 2D photo
[7]Fella accused of ripping off Cisco, Amazon, iRobot, others to the tune of $2m by fraudulently demanding replacements for tech gear
[8]Cybercrime duo accused of picking $2.5M from Apple's orchard
"In 2017, Sun opened eight UPS Store mailboxes using his Maryland driver's license and university identification card. U.S. postal inspectors arrested Sun and Xue in December 2019," said the DoJ.
Following their conviction, the duo are scheduled to be sentenced on June 21 and the length of prison time they get will be considered under US Sentencing Guidelines and other statuary factors, though the maximum term is 20 years each.
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We asked Apple to comment.
The fake-iPhone-for-new-iPhone scam isn't new. A bunch of people were [10]indicted in 2019 in California for tricking Apple into taking back nearly 10,000 counterfeit smartphones and iPads and swapping them with legitimate hardware.
Apple is the most popular smartphone brand in China, taking the top spot from Honor in Q4 2023, despite renewed competition from homegrown hero Huawei, which surprised onlookers with its Mate 60 phone last year.
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iPhones were also the [12]most popular brand in Europe too , ousting Samsung at the top of the sales tree. ®
Get our [13]Tech Resources
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[4] https://www.justice.gov/opa/pr/two-foreign-nationals-convicted-multimillion-dollar-scheme-defraud-apple-inc-out-5000
[5] https://www.theregister.com/2021/08/24/los_angeles_county_man_pretended/
[6] https://www.theregister.com/2023/05/19/2d_photograph_facial_recog/
[7] https://www.theregister.com/2020/03/04/amazon_cisco_product_return_scam_charges/
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[10] https://www.theregister.com/2019/11/15/iphone_clone_fraud/
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[12] https://www.theregister.com/2024/02/20/euro_phones_figures_canalys/
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Reminds me of the Lewinski competition where you could send in a dress stained with the presidents love juice that you had left hanging in your closet for years and get a whopping cash prize. Hundreds of dresses got sent in, but it appears the president had used donor liquid on most of those occasions.
Wrong company
Apple is insanely anal about tracking things. Individual components within a device have their own unique serial numbers,, which are associated with the main device serial number, so any time things don't match up, it'll get flagged. I'm just surprised it took as long as it did for someone to notice. Probably a result of Apple outsourcing a lot of their iDevice repair work to Foxconn. I think maybe in recent years it may have changed, but for the longest time, the only "repair" parts AASPs could get from Apple for an iDevice was a SIM removal tool (the little thing you poke into the hole to pop the card out). You had to ship them to Foxconn (not that Apple would make it easy to figure out it was a third party doing the work) who would usually just buy parts in bulk and then swap them out. When you do a repair on Apple shit, you have to enter in the SN of the individual component(s) you're replacing and if it doesn't match up with their records, it's a whole mess to sort.
Tangent: What always annoyed me when I was working for an AASP, is that Foxconn got to play by a different set of rules. They could do things we couldn't, and Apple also used them to hide defects in new products. Like when the wedge shaped MacBook Air came out, there were massive failures with the GPU, so Apple restricted the ability to get logic boards to Foxconn only. I managed to get one replacement board before the number of repairs must've crossed some internal threshold and they restricted it to Foxconn facilities only.
A bit harsh?
20 years seems a bit harsh to me.
I'm happy they should be punished, fraud is fraud, but 20 years seems a bit over the top.
Re: A bit harsh?
They probably won't get that. Maximum sentences are rarely given unless it's an extreme offense or the criminals concerned have done this many times before. People charged with this who stole orders of magnitude more don't get that sentence, so I doubt these guys will either.
Criminal geniuses
Apart from targeting a company that's a bit thorough at tracking things, doing it at a scale that even a major corporation was likely to notice, and using their own ID to set things up it's difficult to spot quite where it all went wrong...
Phoney
Reminds me of the Walkers crisp competition where you could win an iPhone if you found a fake iPhone in a crisp packet. People were sending in fake iPhones they already had but the Walkers ones were unique so it didn’t work.