Chinese men must pay $1.4m to Apple for fake iPhone scam

A US court has ordered two Chinese citizens to pay Apple a total of around $1.4m in reparations for a scheme which tricked the company into replacing counterfeit iPhones with genuine models.

Haotian Sun (34) of Baltimore has been sentenced to 57 months in prison, three years of supervised release, and ordered to pay $1.07m in restitution to Apple as well as a forfeiture money judgment of just over $53,000.

Pengfei Xue (34) of Germantown, Maryland, received a 54-month prison sentence, and three years of supervised release, and was ordered to pay around $398,000 in restitution to Apple plus a forfeit of almost $20,000.

The pair were involved in a scam in which counterfeit iPhones sourced from Hong Kong were submitted to Apple retail stores for repair, with spoofed serial numbers or IMEI numbers, in the hope that the company would replace the fakes with genuine devices.

Sun and Xue, along with other conspirators, are thought to have submitted more than 6,000 fake phones in this way, causing a $2.5m loss to Apple. Around 2,700 fake iPhones made it through the process and were replaced by Apple.

Earlier this year, they were convicted after a five-day jury trial of one count of conspiracy to commit mail fraud. Sun was also convicted of one count of mail fraud and Xue was convicted of six counts of mail fraud.

Two other Chinese nationals have previously been prosecuted in connection with the scam. One of them, Quan Jiang, was sentenced in 2019 to three years and one month of imprisonment by a US district judge after he was found guilty of scamming Apple for approximately $1m. Charges against his co-defendant Yangyang Zhou were subsequently dismissed.

Photo by Prateek Katyal on Unsplash