iPhone repair fraud: Chinese citizens go to prison
Two Chinese individuals are alleged to have caused Apple over 2.5 million US dollars in damages. They used counterfeit devices in their repair business.
Working on an iPhone 14: Apple spare parts are valuable.
(Image: iFixIt)
Two repair fraudsters from Maryland with Chinese roots who are alleged to have unlawfully stolen more than 6,000 iPhones from Apple have been sentenced to 57 and 54 months in prison respectively. According to a statement from the United States Attorney's Office for the District of Columbia in Washington, this resulted in damages amounting to more than 2.5 million US dollars.
IMEIs and serial numbers spoofed
The two citizens of the People's Republic, Haotian S. and Pengfei X., both 34 years old, together with other accomplices, are alleged to have given counterfeit iPhones to Apple between May 2017 and September 2019 so that the company could repair them. As this was not possible, they received new devices back – worth almost 3.8 million dollars. The devices all came from Hong Kong and were then "traded in" at various Apple stores in the USA – plus several authorized service outlets of the company –. To prevent the devices from being recognized too quickly, they had spoofed serial and IMEI numbers to make them appear genuine.
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The two convicts must pay restitution – together around 1.5 million dollars. Following their release, they must also spend three years on supervised release, which means they will continue to be monitored and must report to their probation officer. The penalties are conspiracy to commit mail fraud and executed mail fraud. The counterfeit devices reached the convicts at several UPS mail receiving centers in the Washington region.
Repair fraud probably a million-dollar business
The issue of repair fraud has affected Apple for years. In Switzerland, for example, there was a similar case in 2020 in which 1,000 iPhones were illegally exchanged. Further cases were reported in 2019, also involving millions – and even 10,000 devices –.
Apple is now trying to combat repair fraud with new serial number procedures and special hardware. It should no longer be so easy to counterfeit iPhones. It remains unclear how often this still occurs, as the case from Maryland / Washington also concerned the years 2017 to 2019, as mentioned above. Apple has also started to stop replacing devices with new (or refurbished) hardware so quickly and is focusing more on repairing individual components.
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