Chinese Man Sentenced After Trying Defrauding Apple $1 Million in Fake iPhones

Sophie Webster, Tech Times 11 March 2022, 11:03 am

Authorities in Alexandra, Virginia, had sentenced a Chinese citizen to prison for participating in a plan to defraud Apple out of $1 million.

Man Tried to Defraud Apple

The suspect, Teang Liu, together with two other Chinese nationals, had successfully defrauded Apple by sending out defective fake iPhones and demanding a real one as a replacement, according to MacObserver.

According to the criminal complaint, the three Chinese nationals defrauded Apple out of more than 2,500 new iPhones and even tried to defraud Apple out of more than 600 real iPhones.

Liu pleaded guilty in February 2021 in the U.S. District Court for the District of Columbia was sentenced to a year in prison for one count of conspiracy to commit mail fraud.

Also Read: Buyer, Beware: This $100 Fake iPhone X Is A Security Nightmare

Aside from imprisonment, Liu will have to pay a total of $577,780 in restitution and $57,780 in a forfeiture money judgment. Once Liu is released, he will be under supervision for a year, as per the Department of Justice's instructions.

In 2016, Haiteng Wu, another Chinese citizen, recruited Liu. He also recruited his own wife, Jiahong Cai, also a Chinese citizen, to undertake fraudulent activities.

From 2016 to 2018, the three Chinese citizens sent defective and fake iPhones to Apple and demanded a replacement.

The fake iPhones came from Hong Kong and carried fake IMEI and serial numbers that corresponded to those from in-warranty iPhones.

After getting real iPhone units as a replacement, the conspirators then sent them to their contacts abroad, including their contacts in Hong Kong, so they could sell them at standard prices.

As for Liu, he was in charge of opening commercial mail agency mailboxes, mostly from UPS. Using fake IDs given to him by Wu, Liu would return inauthentic iPhones to different retail stores. He traveled as far as the Rocky Mountains and Florida to defraud Apple stores.

The three Chinese citizens were able to pull off the scheme for years, and they got a total of $1 million from defrauding Apple.

That is until they were caught in 2019, and they have been detained by the authorities since. They all pleaded guilty to their charges back in 2020, and their sentence was read to them earlier this year.

Aside from Liu, Wu was sentenced to two years and two months in jail, while Cai was sentenced to 5 months in D.C jail. They are also ordered to be deported as soon as they've completed their jail time.

Chinese Citizen in Oregon Defrauded Apple

This is not the first time that Apple has been defrauded. Back in 2019, a Chinese man from Oregon was able to defraud Apple of 1,500 iPhones, according to Bloomberg.

According to ABC News, Quan Jiang pulled off the scheme for two years. He sent fake iPhones to Apple, claiming that they would not turn on and needed to be replaced under warranty. He was able to get 1,500 authentic iPhones, which is $600 in total.

The 30-year-old suspect was a former engineering student at a community college in Albany, Oregon. He pleaded guilty in federal court in May 2019 to trafficking in counterfeit goods.