Scammers in the slammer for years after ripping off Apple with fake iPhone returns
(2024/10/04)
- Reference: 1727993803
- News link: https://www.theregister.co.uk/2024/10/03/counterfeit_iphone_scammers_prison/
- Source link:
Two fraudsters will spend nearly five years behind bars each and pay a combined $1.5 million for bilking Apple out of millions of dollars worth of iPhones.
Haotian Sun, 34, a Chinese citizen living in Baltimore, Maryland, was sentenced to 57 months in prison followed by three years of supervised release, and ordered to pay $1,072,200 in restitution to Apple plus a forfeiture money judgment of $53,610.
The other scammer, Pengfei Xue, 34, a Chinese citizen living in Germantown, Maryland, got 54 months in prison, three years of supervised release, and has been ordered to pay $397,800 to Apple along with a $19,890 money judgment.
[1]
According to the court documents, between June 2017 and December 2019, the two men engaged in a scheme to return fake iPhones to Apple for repair and trick the iBiz into replacing them with real ones.
[2]
[3]
The duo received shipments of inauthentic iPhones from Hong Kong at mailboxes throughout the Washington DC area. They then [4]"returned" the fake phones , with spoofed serial numbers and/or IMEI numbers, to Apple retail stores, authorized service providers, or via the mail.
"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
[6]Duo face years in prison over counterfeit iPhone scam
[7]Feds indict 14 over alleged scheme to get Apple to replace fake iPhones with real ones
[8]Fraudsters abused Apple Stores' third-party pickup policy to phish for profits
[9]Apple fans deluged with phony password reset requests
In total, the two men along with two other co-conspirators, submitted more than 6,000 phony phones to Apple, costing the iThings giant more than $2.5 million in losses.
Apple did not immediately respond to The Register 's request for comment.
[10]
Sun and Xue were both convicted in February after a five-day jury trial of one count of conspiracy to commit mail fraud. Sun was also convicted of one count of mail fraud and Xue was convicted of six counts of mail fraud.
And while their stretch in the big house will give the two plenty of time to rethink their life choices, they got off relatively easy for their multi-million-dollar scheme. The maximum term for the duo's crimes is 20 years each. ®
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[4] https://www.theregister.com/2024/02/21/counterfeit_iphone_scam/
[5] https://regmedia.co.uk/2024/10/03/iphone_scam_sun_xue_complaint.pdf
[6] https://www.theregister.com/2024/02/21/counterfeit_iphone_scam/
[7] https://www.theregister.com/2019/11/15/iphone_clone_fraud/
[8] https://www.theregister.com/2024/04/18/blackhat_apple_korea/
[9] https://www.theregister.com/2024/03/27/apple_passcode_attack/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/bootnotes&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zv9oaP9jyF4FcyWCI7WADwAAAE0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://whitepapers.theregister.com/
Haotian Sun, 34, a Chinese citizen living in Baltimore, Maryland, was sentenced to 57 months in prison followed by three years of supervised release, and ordered to pay $1,072,200 in restitution to Apple plus a forfeiture money judgment of $53,610.
The other scammer, Pengfei Xue, 34, a Chinese citizen living in Germantown, Maryland, got 54 months in prison, three years of supervised release, and has been ordered to pay $397,800 to Apple along with a $19,890 money judgment.
[1]
According to the court documents, between June 2017 and December 2019, the two men engaged in a scheme to return fake iPhones to Apple for repair and trick the iBiz into replacing them with real ones.
[2]
[3]
The duo received shipments of inauthentic iPhones from Hong Kong at mailboxes throughout the Washington DC area. They then [4]"returned" the fake phones , with spoofed serial numbers and/or IMEI numbers, to Apple retail stores, authorized service providers, or via the mail.
"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
[5]PDF
. "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."[6]Duo face years in prison over counterfeit iPhone scam
[7]Feds indict 14 over alleged scheme to get Apple to replace fake iPhones with real ones
[8]Fraudsters abused Apple Stores' third-party pickup policy to phish for profits
[9]Apple fans deluged with phony password reset requests
In total, the two men along with two other co-conspirators, submitted more than 6,000 phony phones to Apple, costing the iThings giant more than $2.5 million in losses.
Apple did not immediately respond to The Register 's request for comment.
[10]
Sun and Xue were both convicted in February after a five-day jury trial of one count of conspiracy to commit mail fraud. Sun was also convicted of one count of mail fraud and Xue was convicted of six counts of mail fraud.
And while their stretch in the big house will give the two plenty of time to rethink their life choices, they got off relatively easy for their multi-million-dollar scheme. The maximum term for the duo's crimes is 20 years each. ®
Get our [11]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/bootnotes&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zv9oaP9jyF4FcyWCI7WADwAAAE0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/bootnotes&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zv9oaP9jyF4FcyWCI7WADwAAAE0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[4] https://www.theregister.com/2024/02/21/counterfeit_iphone_scam/
[5] https://regmedia.co.uk/2024/10/03/iphone_scam_sun_xue_complaint.pdf
[6] https://www.theregister.com/2024/02/21/counterfeit_iphone_scam/
[7] https://www.theregister.com/2019/11/15/iphone_clone_fraud/
[8] https://www.theregister.com/2024/04/18/blackhat_apple_korea/
[9] https://www.theregister.com/2024/03/27/apple_passcode_attack/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/bootnotes&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zv9oaP9jyF4FcyWCI7WADwAAAE0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://whitepapers.theregister.com/
Stealing phones worth 5 million or whatever
DS999
Doesn't mean they made anywhere near that much profit. You can't sell stolen property at retail.
Most likely the forfeiture amounts were calculated based on showing how much money they'd made off the scheme, so they aren't going to have a fortune awaiting them when they get out of prison.
Yorick Hunt
"Apple would have known exactly what phones were sent out in this scheme, at least most of them. Wouldn't they be able to remotely disable them, justified under "receiving stolen property" laws? Or have service providers block them based on IMEI?"
My thoughts exactly. Was there no examination of the received devices, or did they simply throw them onto the e-waste pile? Did they even open the boxes to make sure they even contained 'phones?
So, basically, go ahead and do crimes like this if you don't mind 5 years in jail when you can split a few million dollars in profit afterward. (Or a bit less since they likely sold them cheaper than Apple did. But even at 3/4 or half the price, that's a lot of money for 6000 iPhones.) Kind of the American corporate motto: a million dollars in fines for criminal acts is okay when you made 5 million in profit by it.
Apple would have known exactly what phones were sent out in this scheme, at least most of them. Wouldn't they be able to remotely disable them, justified under "receiving stolen property" laws? Or have service providers block them based on IMEI?