Chinese national gets 3 years in US Federal prison over iPhone trafficking scam that cost Apple $900,000
The counterfeit devices - image via AppleInsider
What you need to know
- A 30 year old Chinese national has been sentenced to 37 months in prison after pleading guilty to trafficking counterfeit iPhones
- The former student shipped inoperable, counterfeit iPhones to the US from Hong Kong.
- Working with a friend, these phones were sent to Apple for repair before being shipped back to China for resale, netting the two an estimated $900,000.
A 30 year old Chinese national has been sentenced to 37 months in US Federal Prison after pleading guilty to one count of trafficking in counterfeit goods. Quan Jiang, a former Linn Benton Community College engineering student, will also serve 3 years' supervised released after admitting he shipped counterfeit iPhones from Hong Kong to the U.S.
According to AppleInsider, between January 2016 and February 2018, Jiang recieved shipments of bricked, counterfeit iPhones from contacts in China, 20-30 at a time. He and a partner, Oregon State University student Yangyan Zhou, would take these phones to Apple Stores, or send them to Apple for warranty replacements. Somehow, Apple fell for this and shipped back hundreds of real, working iPhones. The working iPhones were returned to China for resale, the profits were sent to Jiang's mother, and the money was deposited in Jiang's bank account.
According to the report:
After initially denying receipt of any such notices, Jiang admitted knowledge that the iPhones being imported were not real, and that he was aware that sending the goods to Apple for repair was illegal. It is estimated that over 2,000 counterfeit iPhones were imported over 2 years, a shocking 1,500 of which were traded for replacements worth roughly $600 each. As such Jiang managed to defraud Apple to the tune of roughly $900,000. The report notes that it is unclear whether Jiang's partner Zhou will be punished for his role in the scheme.
Perhaps the only thing more baffling than the scheme itself, is the fact that Apple was duped by one man into replacing 1,500 counterfeit iPhones with real ones. One can only assume that the counterfeits were so convincing that it would impossible to determine whether or not they were fake, or that Jiang used many different stores and postal locations when sending the iPhones to Apple, such that each only dealt with a few of the devices.
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Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.
Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9