Duo sentenced to prison for a fraudulent iPhone repair scheme that cost Apple $2.5 million
The US Department of Justice has announced that two Chinese citizens living in Maryland have been sentenced for a massive scheme to defraud Apple. Officials revealed that the duo sent over 6,000 counterfeit iPhones from Hong Kong to the company for repairs. By using spoofed IMEI and serial numbers, they managed to score genuine devices as replacements.According to the DOJ, Haotian Sun and Pengfei Xue ended up costing Apple over $2.5 million. The two were sentenced to 57 and 54 months in prison, respectively.
In addition to the prison terms, Judge Kelly today ordered Sun to serve three years of supervised release and pay $1,072,000 in restitution. Judge Kelly ordered Xue to serve three years of supervised release and pay $397,800 in restitution.
– US Attorney’s Office, District of Columbia, October 2024, October 2024
What was the scheme exactly, you wonder? From May 2017 to September 2019, Sun and Xue orchestrated a scheme where they received fake iPhones shipped from Hong Kong. As I mentioned, they used spoofed serial and IMEI numbers to return these knockoffs to Apple retail stores and authorized service providers. During those two years, they submitted over 6,000 iPhones to Apple. The intended loss was around $3.8 million, but the actual loss ended up exceeding $2.5 million.
Earlier this year, in February, Sun and Xue were convicted of mail fraud and conspiracy to commit mail fraud, with each charge carrying a maximum penalty of 20 years in prison.
Counterfeit Apple devices are all too common, so I think it is crucial to be cautious when purchasing second-hand items or buying from unauthorized retailers. As you can see from this latest news, some fakes are crafted so well that even employees at Apple retail stores and Authorized Service Providers struggle to spot them. While iPhones are the primary targets for knockoffs, AirPods also face their fair share of imitation. If you’re curious about how to differentiate between genuine and fake, take a look at our guide on spotting fake AirPods Pro.