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Duo face 20 years in prison over counterfeit iPhone scam

Two Chinese nationals are facing a maximum of 20 years in prison after being convicted of mailing thousands of fake iPhones to Apple for repair in the hope they’d be replaced with new handsets.

This is according to the Attorney’s Office for the District of Columbia following the decision by a federal jury to convict Maryland residents Haotian Sun, 33, and Pengfei Xue, also 33, of mail fraud and conspiracy to commit mail fraud.

The Department of Justice says the pair submitted upwards of 5,000 “inauthentic” iPhones to the tech giant “intending to cause a loss of more than $3 million to Apple” between May 2017 and September 2019.

Apple runs a one-year warranty scheme on its iPhones and offers to exchange malfunctioning products for shiny new ones. It was this scheme the criminals tried to defraud.

In a statement, the DoJ confirmed that along with their unnamed co-conspirators, the pair were sent “counterfeit iPhones to Apple for repair to get Apple to exchange them with genuine replacement iPhones.”

The counterfeit phones were originally imported from Hong Kong via UPS mailboxes in the DC Metropolitan area. The dodgy devices were then shipped onto Apple retail stores or Authorized Resellers with spoofed serial numbers and/or IMEI numbers.

“In 2017, Sun opened eight UPS Store mailboxes using his Maryland driver’s license and university identification card. U.S. postal inspectors arrested Sun and Xue in December 2019,” said the DoJ.

Following their conviction, the duo are scheduled to be sentenced on June 21 and the length of prison time they get will be considered under US Sentencing Guidelines and other statuary factors, though the maximum term is 20 years each.

We asked Apple to comment.

The fake-iPhone-for-new-iPhone scam isn’t new. A bunch of people were indicted in 2019 in California for tricking Apple into taking back nearly 10,000 counterfeit smartphones and iPads and swapping them with legitimate hardware.

Apple is the most popular smartphone brand in China, taking the top spot from Honor in Q4 2023, despite renewed competition from homegrown hero Huawei, which surprised onlookers with its Mate 60 phone last year.

iPhones were also the most popular brand in Europe too, ousting Samsung at the top of the sales tree. ®