Chinese student pleads guilty in fake iPhone scam

One of the students accused of fraudulently submitting thousands of repair requests to Apple using counterfeit iPhones has pleaded guilty to the charges.

In a plea deal, Quan Jiang agreed to pay $200,000 in restitution to Apple ahead of his scheduled August 28 sentencing date, and also to forfeit a 2015 Mercedes-Benz seized by investigators. It is understood that prosecutors are still seeking a prison term of around three years for Jiang, although his defence lawyers are expected to argue for probation.

He faces a maximum sentence of 10 years in prison, a $2m fine or twice his proceeds, whichever is greater, and three years of supervised release.

Jiang and another student – Yangyang Zhou – have been charged with sending Apple fake iPhones, claiming they were faulty, and receiving brand authentic new or factory refurbished models as replacements under the company’s warranty and repair process.

They netted almost $900,000 in illicit gains by arranging for the replacements to be sold on, according to the complaint.

Jiang is thought to have delivered or shipped around 2,000 phones to Apple, which responded by sending out almost 1,500 replacement iPhones, each with an approximate resale value of $600.

“Individuals who deal in counterfeit goods would have you believe that these are victimless crimes,” commented Brad Bench, Special Agent in Charge of Homeland Security Investigations (HSI) Seattle.

“Do not be fooled, they’re not. Not only do they hurt the economy and legitimate businesses, but they also impact consumers directly. “