Fake iPhone scam costs Apple nearly $900,000

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Can you identify the iPhone clone? (The fake is on the right.)
Can you identify the iPhone clone? (The fake is on the right.)
Photo: Gabe Trumbo/MyPhones Unlimited

Federal agents recently busted two college students who allegedly made nearly $1 million by returning fake iPhones to Apple.

Officials charged Quran Juan and Yangyangg Zhou, both Chinese nationals attending college in Oregon, with participating in a counterfeit iPhone scam. The duo reportedly submitted more than 2,000 iPhones to Apple claiming, the devices were broken and wouldn’t power on. The fake iPhones were only worth about $30, allowing the scammers to pocket nearly $600 for each successful return, authorities said.

Officials say Jiang tried to return more than 2,000 iPhones and sent more than 3,000 warranty claims. Apple rejected 1,500 of the claims, but the company issued 1,400 replacement phones. The men then allegedly sent the working iPhones back to China and got a cut of the sales.

Apple lost nearly $900,000 in the scam, according to a report from Oregon Live. Not a bad side hustle for two engineering students staying in the United States on a student visas. (Their visas likely will be permanently revoked.)

Jiang and Zhou both claim they didn’t know the phones sent to them from China were fake. Both men lived in Corvallis, Oregon. Zhou recently completed his degree at Oregon State University. Jiang was studying electrical engineering at Linn Benton Community College.

Authorities charged Jiang with trafficking counterfeit goods and wire fraud. He was released from jail with a GPS monitor. Zhou stands accused of submitting false information on an export declaration. His lawyer says he wasn’t aware of any counterfeiting and thinks he will be vindicated.