Two Young Men Sentenced for $2.5 Million Apple Fraud
In a significant fraud case, a US court has sentenced two young men, Haotian Sun and Pengfei Xue, to prison terms of 57 months and 54 months, respectively, for their elaborate scheme against tech giant Apple. The court's decision comes after the duo was found guilty of orchestrating a fraud that resulted in Apple suffering a loss exceeding $2.5 million.
The fraudulent activities spanned from May 2017 to September 2019, during which Sun and Xue devised a clever trick to exploit Apple's warranty system. They procured counterfeit iPhones from Hong Kong and created fake serial numbers to pass them off as legitimate devices. By claiming these counterfeit phones were broken and in need of repair, they managed to deceive Apple into sending them new replacement devices.
According to reports, the two men shipped thousands of fake iPhones to various locations, including Washington mailboxes, before returning them to Apple retail stores and authorized service providers. Apple, unable to fix the non-existent issues with the counterfeit phones, unwittingly replaced them, leading to substantial financial losses. The total losses attributed to their scheme were approximately $3.8 million, with an actual loss to Apple calculated at more than $2.5 million.
The court also imposed hefty fines on the fraudsters, with Sun ordered to pay $1,072,000 and Xue $800,397, in addition to their prison sentences and three years of supervised release following their incarceration. This case highlights the ongoing challenges tech companies face in combating fraud and the lengths to which individuals will go to exploit vulnerabilities in warranty and return systems.
