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Apr 12, 2001
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Two Maryland residents who defrauded Apple out of 6,000 iPhones worth over $2.5 million were sentenced to prison today, according to the United States Department of Justice. The duo devised a repair scheme where they sent in counterfeit iPhones in order to get genuine iPhones in exchange.

iPhone-14-Yellow-Feature-2.jpg

Chinese nationals Haotian Sun and Pengfei Xue will each spend more than four years in prison. Sun was sentenced to 57 months in prison, while Xue was given 54 months. Both will serve three years of supervised release after their prison terms, and will need to pay restitution to Apple. Sun has been ordered to pay $1,072,000, while Xue has been ordered to pay $397,800.

Between May 2017 and September 2019, Sun and Xue received shipments of inauthentic iPhones from Hong Kong, and used spoofed serial numbers and/or IMEI numbers to return them to Apple retail stores and Apple Authorized Service Providers. Over 6,000 iPhones were submitted to Apple during that two-year period, according to trial evidence. The intended loss was approximately $3.8 million, and actual loss exceeded $2.5 million.

Back in February, Sun and Xue were found guilty of mail fraud and conspiracy to commit mail fraud, charges that carried a maximum sentence of 20 years in prison.

Article Link: Duo That Cost Apple $2.5 Million in Fraudulent iPhone Repair Scheme Get Prison Sentences
 

ThomasJL

macrumors 68000
Oct 16, 2008
1,757
3,883
Two Maryland residents who defrauded Apple out of 6,000 iPhones worth over $2.5 million were sentenced to prison today, according to the United States Department of Justice.
[sarcasm]
How dare anyone try to rip off Apple! 😡 It is morally wrong to rip off Apple, but it is morally right for Apple to rip off their customers. Tim Cook is a saint, as are ultra-rich Apple shareholders, so it is very bad when they lose money, but it is totally OK when ordinary Apple customers lose money.
[/sarcasm]
 
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roar08

macrumors 6502a
Apr 25, 2008
783
2,410
[sarcasm]
How dare anyone try to rip off Apple! It is morally wrong to rip off Apple, but it is morally right for Apple to rip off their customers. Tim Cook is a saint, as are ultra-rich Apple shareholders, and anyone who makes them lose money should be sentenced to prison.
[/sarcasm]

Not really sure what you were going for here, but I suspect that makes at least two of us.
 

ryanarrr

macrumors newbie
Sep 19, 2014
18
20
How good are these "counterfeit" phones? Do they actually turn on? Run iOS? Maybe they are made from authentic but broken Apple logic boards? Or are they just dummy phones? Unless they are assembled from some authentic parts it's hard to imagine how Apple would be fooled by this.
 

Joshuaorange

macrumors regular
Nov 22, 2023
139
250
[sarcasm]
How dare anyone try to rip off Apple! 😡 It is morally wrong to rip off Apple, but it is morally right for Apple to rip off their customers. Tim Cook is a saint, as are ultra-rich Apple shareholders, so it is very bad when they lose money, but it is totally OK when ordinary Apple customers lose money.
[/sarcasm]
This has to be the dumbest take I’ve ever seen. One is factually fraud. The other is voluntary and subjective. They’re not even remotely the same.
 

Wanted797

macrumors 68000
Oct 28, 2011
1,797
3,820
Australia
How good are these "counterfeit" phones? Do they actually turn on? Run iOS? Maybe they are made from authentic but broken Apple logic boards? Or are they just dummy phones? Unless they are assembled from some authentic parts it's hard to imagine how Apple would be fooled by this.
I imagine they were a good external mock up with fake details of a real phone. They didn’t have to fool apple only the store employee who sees what looks like an iPhone not turning on or boot looping an apple logo.

They probably gave fake names and details to collect the replacement. By the time “Apple” notice they’ve moved on and it’s fake info anyway.

I assume Apple would have been watching and waiting to collect evidence and footage of them over time.
 

ikramerica

macrumors 68000
Apr 10, 2009
1,653
1,954
I imagine they were a good external mock up with fake details of a real phone. They didn’t have to fool apple only the store employee who sees what looks like an iPhone not turning on or boot looping an apple logo.

They probably gave fake names and details to collect the replacement. By the time “Apple” notice they’ve moved on and it’s fake info anyway.

I assume Apple would have been watching and waiting to collect evidence and footage of them over time.
Nope. They can actually work in many cases. I know someone who bought what they thought was a used iPhone from ebay or something. They had me look at setting it up. It ran iOS but couldn’t be updated. And the model number didn’t match the physical phone. It took me a while to discover it wasn’t working right because it was counterfeit.
 

mpuk

macrumors member
Apr 16, 2015
49
89
The Divided United Kingdom
Always interesting to me that charges like this are 'mail fraud' instead of just straight up 'theft'.
"In the U.S., prosecutors often pursue charges of mail fraud rather than theft because mail fraud is a federal crime, which can carry more significant penalties and broader jurisdictional power than many state-level theft charges. Mail fraud is categorized as a felony, and the penalties for it can include substantial prison time (up to 20 years) and heavy fines. In contrast, theft can be charged at various levels (misdemeanor or felony) depending on the value of the stolen property, and the penalties can vary significantly depending on the state laws."
 

Mr.Ez

macrumors newbie
Oct 3, 2024
3
0
How good are these "counterfeit" phones?
This scam sounds very similar to what was happening around 2014 in China. People would buy new iPhones, take them to repair shops that swapped in counterfeit parts made to look like real Apple components, along with actual broken Apple parts, creating a “frankenphone.” These individuals then exchanged the “broken” iPhones for new replacements and received payments from the repair shops for the genuine Apple parts.

Apple reported losing $12.3 million due to such frauds. Considering the iPhone 6 cost only $300-$400 at the time, the extent of the scam was significant. It wasn’t clear whether this was only happening in Shenzhen or if it was a nationwide issue. It seemed to be widespread, spread through word of mouth—John would do it, then share the method with a WeChat contact with his mom, who would pass it on to her friend, and so forth.
 

JitteryJimmy

macrumors regular
Apr 12, 2008
238
405
Why are they not being deported after serving time???
They will be. Prison time here is the penalty, but their Visa has been revoked.

Their "supervised release" will consist of either continued jail time for visa violation reasons, or the "supervised release" portion of their sentence will be dropped due to immediate deportation, or some blend of the two.
 
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