Chinese students scam Apple out of $900,000 in iPhone scheme

The two men allegedly cheated Apple by trading knockoff Chinese iPhones for real ones.

    2019/04/09

NSFW    PORTLAND — Two Chinese college students allegedly scammed Apple out of almost $900,000 by trading in fake iPhones for real ones, according to NPR.
According to federal prosecutors, Yangyang Zhou and Quan Jiang, engineering students in their early 20s attending Oregon State University and Linn Benton Community College, took part in an elaborate scheme that involved friends and family, a whole mess of nonsensical pseudonyms and a ton of mailing addresses.
According to a criminal complaint filed in Portland, the two men smuggled thousands of knockoff iPhones from China and then filed warranty complaints with Apple, saying the phones were busted and wouldn't turn on.
Apple would then replace the fakes with brand new iPhones in most cases, which the duo would send back to China to be resold for a profit, of which they got a cut.
According to court documents, Zhou and Jiang, who were both in the U.S. on F-1 student visas at the time, tried the scam with 3,069 iPhones from April 2017 through March 2018.
Looks as if the two were successful half of the time. Apple told investigators that 1,493 warranty claims were linked to Jiang and/or Zhou were processed and replacement devices were issued at loss of $600 per iPhone.
According to authorities, Jiang's mother collected his cut in China and then put the money into a U.S. account.
The heat came down when Customs and Border Protection seized more than five shipments of fake iPhones addressed to them.
Jiang has been charged with trafficking counterfeit goods and wire fraud. Zhou has been charged with submitting false or misleading information on export declaration and faces up to $10,000 and five years in the slammer.
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