Pair faces 20 years in jail over iPhone fraud scheme


Fake iPhone fraud scheme
Take note: Trying to trade in 5,000 fake iPhones for real ones might not work.
Photo: Photo: Donald Tong/Pexels CC

A federal jury found two Chinese men living in Maryland guilty Tuesday in a fake iPhone fraud scheme. They attempted to defraud Apple in a $3 million scheme to replace fake iPhones with real ones, the U.S. Attorney’s Office for the District of Columbia said.

Haotian Sun and Pengfei Xue’s mail fraud convictions carry a maximum sentence of 20 years in prison.

Pair found guilty in fake iPhone fraud scheme worth $3 million

In another iPhone fraud scheme, a federal jury in U.S. District Court in the District of Columbia found Sun and Xue, both 33 years old, guilty of mail fraud as well as conspiracy to commit mail fraud, a team led by U.S. Attorney Matthew M. Graves said.

The crimes, described as a “sophisticated scheme,” involved 5,000 fake iPhones from Hong Kong submitted for repair at authorized locations in the Washington, D.C., area in an attempt to get genuine replacements worth a total of about $3 million.

Here’s how the U.S. Attorney’s Office described what went down:

According to the government’s evidence, between May 2017 and September 2019, Sun, Xue and other conspirators defrauded Apple Inc. by submitting counterfeit iPhones to Apple for repair to get Apple to exchange them with genuine replacement iPhones. Sun and Xue received shipments of inauthentic iPhones from Hong Kong at UPS mailboxes throughout the D.C. Metropolitan area.

They then submitted the fake iPhones, with spoofed serial numbers and/or IMEI numbers, to Apple retail stores and Apple Authorized Service Providers, including the Apple Store in Georgetown. Trial evidence showed that conspirators submitted more than 5,000 inauthentic phones to Apple during the conspiracy, intending to cause a loss of more than $3 million to Apple.

Sun and Xue, who used various aliases in the fake iPhone fraud scheme, were arrested on December 5, 2019 after the U.S. Postal Inspection Service and Homeland Security Investigations looked into the matter.

As for the possible 20 years in the slammer, U.S. District Court Judge Timothy J. Kelly scheduled sentencing for June 21, 2024.

Source: U.S. Attorney’s Office, District of Columbia


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