Two Chinese nationals, Haotian Sun and Pengfei Xue, are facing potential 20-year prison sentences for attempting to scam Apple out of 5,000 iPhones, totaling over $3 million. Exploiting Apple’s one-year warranty and insurance protection plans, the fraudsters submitted fake iPhones for repair and replacement. Over the course of the conspiracy, spanning from July 2017 to December 2019, they shipped counterfeit devices with altered serial numbers and IMEI from Hong Kong to UPS mailboxes in the United States. The obtained genuine replacements were then shipped back to Hong Kong for resale, resulting in an unjust enrichment scheme.
The indictment reveals that the conspirators used their actual identities, driver’s licenses, and university identification cards to open mailboxes and submit counterfeit iPhones. Apple’s various channels for warranty service and handset replacement, including UPS shipments, visits to Apple retail stores, and service providers, were exploited in this elaborate plan. Convicted of mail fraud and conspiracy to commit mail fraud, Sun and Xue await sentencing on June 21, 2024, facing a maximum penalty of 20 years in prison. The case highlights the challenges faced by tech companies in combating fraudulent activities and underscores the importance of robust warranty verification processes.
