Two men involved in an elaborate scheme to trick Apple into replacing about 6,000 counterfeit iPhones with genuine ones were sentenced to prison this week, the U.S. Department of Justice announced Thursday.
Along with their co-conspirators, 34-year-old scammers, Haotian Sun and Pengfei Xue, pressured Apple for approximately $2.5 million as employees failed for years to uncover what the DOJ described as a rather 'advanced' plan. .
Now Sun has been sentenced to 57 months in prison and must repay more than $1 million to Apple. For his part, Xue was sentenced to 54 months and ordered to pay $397,800 in restitution, the DOJ said. In addition, both men must also serve three years of supervised release and forfeit additional thousands of dollars after sentencing.
The plan involved tricking Apple into accepting fake phones during returns by spoofing serial numbers or International Mobile Equipment Identity (IMEI) numbers associated with real customers' iPhones still under warranty. (Apple offers a one-year warranty on new iPhones found to be defective and sells insurance plans to extend warranties.)
The scammers were caught and convicted of mail fraud and conspiracy to commit mail fraud after an Apple investigator tipped off law enforcement, according to a 2019 affidavit by Postal Inspector Stephen Cohen.
Law enforcement authorities intercepted packages and confirmed that thousands of counterfeit phones were shipped from China and then delivered by mail or in person to Apple for repair. These counterfeit phones were out of warranty or contained counterfeit parts, according to Cohen, but Apple “mistakenly” believed they were real phones with real warranties, often replacing dozens of fake phones that were fraudulently returned in a single shipment, Cohen said.
