Chinese college students duped Apple out of USD 1 mn

Sheri Evans
April 7, 2019

That suggests that in order for the scam to work, Jiang and Zhou had to have access to authentic iPhone serial or International Mobile Equipment Identity numbers, also called IMEI numbers, that would indicate the devices were still covered by the fix warranty. Altogether, Quan Jiang and Yangyang Zhou are being blamed for stealing $895,000 worth of iPhones from Apple through this scheme.

The fake-iPhone-laundering scam has been around for several years and has become so widespread in China that "Apple has already developed a more rigorous replacement plan to avoid" fraud. They then sent it to Apple complaining that they wouldn't turn on, Cnet reported. The genuine devices were then sent overseas and sold for hundreds of dollars. Quan Jiang and Yangyangg Zhou were staying in the United States with a student visa in Oregon. This could land up to $10,000 fine or five years in prison.

Zhou is accused of submitting false export declarations, while Jiang is accused counterfeit good trafficking and wire fraud, our sister site ZDNet noted. Once they received the fake smartphones - which were apparently close enough to the real thing for Apple not to immediately notice - the duo returned them to Apple, requesting replacements.

Even though both the accused remain out of custody, Jiang, who was accused back in 2018, is being monitored by Global Positioning System.

The Verge reports that a Homeland Security agent explained that the scam was working for them because Apple Store employees could not confirm if they were real devices since they would not power on. The investigation revealed that Jiang, who took care of placing return requests with Apple, made 3,096 iPhone warranty claims.

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According to the affidavit, Apple's legal counsel sent cease-and-desist orders to Jiang in June and July of 2017, notifying him that Apple knew he was importing fake iPhone.

Officials also found at least four different mailboxes associated with Zhou, one of which was found with a package containing 25 fake iPhones.

It was Jiang's job to take the fake iPhones to an Apple store for a replacement, or use the online fix program.

Last year, a Chinese national living in New Jersey on a student visa pled guilty to selling fake iPhones and iPads to customers, pocketing $1.1 million in sales revenue from the scheme.

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