Two men tricked Apple into shipping them thousands of iPhones worth $2.5 million by asking them to repair fake iPhones, according to federal authorities.
Haotian Sun, a Chinese citizen living in Baltimore, and Pengfei Xue, who also immigrated from China and settled in Germantown, Maryland, ran what federal authorities called a “sophisticated” scheme to sell Apple. They successfully tricked people into thinking the iPhone was real. The Justice Department said Thursday that the incidents occurred between 2017 and 2019.
Mr. Sun, 33, was sentenced to 57 months in prison and ordered to pay more than $1 million in restitution to Apple, while Mr. Xue, 33, was sentenced to 54 months in prison and ordered to pay Apple $397,800 in restitution. ordered to repay.
The two men and their co-conspirators were convicted of shipping 6,000 counterfeit iPhones received by Apple from Hong Kong with spoofed serial numbers to Apple retail stores and other authorized service providers.
They were arrested after an Apple tipster notified federal authorities, according to an affidavit from Postal Inspector Stephen Cohen.
Law enforcement managed to intercept the package and confirmed that thousands of counterfeit cell phones were being shipped from China.
Apple offers a one-year warranty to iPhone users if they return their device for repair. However, Sun and Xue ended up shipping phones that were out of warranty or contained counterfeit parts.
Cohen said Apple “mistakenly” believed the phones had a substantial warranty. The company often replaced dozens of fraudulently returned fake phones in a single shipment.
The two also covered their tracks by using different pseudonyms and opening new mailboxes to make it appear that Apple was not receiving calls from the same person.
When federal agents began intercepting the packages, they were able to trace Sun and Xue’s addresses.
Investigators did not immediately arrest the two men. Instead, they wrote down the serial numbers of every phone in every intercepted package, Cohen said, “to ensure that the package was delivered to its intended recipient.”
The government then gave Apple a serial number. The company then provided Apple with the name, address, and email address used to process the return.
Investigators said Sun submitted more than 1,000 repair requests using multiple email addresses, some of which were registered under his real name.
Police also dug through trash cans outside the couple’s home and set up a stakeout to track when they took the intercepted packages to the Apple Store.
