Five men arrested after defrauding Apple of $12 million by exchanging fake iPhones for real ones

The fake iPhones and iPads did not work, and after Apple Store employees replaced them with real iPhones and iPads, the original Apple products were shipped out of the country. United States Attorney Martin Estrada said: “The defendants are accused of exploiting Apple’s customer service policies to steal more than $12 million in merchandise. Businesses should not be harassed and defrauded for being responsive to customer needs, and these federal charges send the message that our office will take decisive action to detect and prosecute those who commit fraud.”

The five men, all Chinese nationals, were detained last Thursday. Yang Song, Junwei Jiang, Zhengxuan Hu, Yushan Lin and Shuyi Xing face charges of aggravated identity theft, conspiracy to traffic in counterfeit goods and conspiracy to commit wire and mail fraud. The defendants face 20 years in prison for each of the conspiracy to commit fraud charges and up to two years in prison for the identity theft charge. If all five are found guilty of conspiracy to traffic in counterfeit goods, they could each face 10 years in prison.

To make this plan work, the five conspired with other ring members in China to ship non-working counterfeit iPhones and iPads to various locations in Southern California. You’re probably wondering how this scam wasn’t caught by Apple Store employees. The counterfeit devices had identification numbers that matched real Apple products owned by US consumers and still under warranty.

The defendants returned the counterfeit devices to more than 10 Apple Stores in Southern California, including stores in areas such as Beverly Hills, Northridge and Rancho Cucamonga. On some days, the ring visited more than 10 Apple Stores in Southern California to exchange fake models for real ones.