Chinese Duo Found Guilty of $3m Apple Fraud Plot

Two Chinese nationals have been found guilty of running a sophisticated fraud scheme in which they attempted to con Apple out of millions of dollars, by sending it thousands of fake iPhones.

Haotian Sun (aka Hao Sun, Jack Sun) of Baltimore, Maryland, and Pengfei Xue, 33, of Germantown, Maryland, were convicted of mail fraud and conspiracy to commit mail fraud by a federal jury in the District of Columbia.

Between May 2017 and September 2019, they are said to have conspired with Frank Sun, 33, of Baltimore, Maryland, and others, to send Apple counterfeit iPhones for repair – hoping to have them exchanged by the tech giant for genuine replacements.

Sun and Xue received the fakes from Hong Kong via UPS mailboxes in the Washington DC Metropolitan area. They subsequently submitted the devices, which had spoofed serial numbers and/or IMEI numbers, to Apple retail stores and Apple Authorized Service Providers, according to the Department of Justice (DoJ).

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Sun was apparently traced after opening eight UPS Store mailboxes in 2017 using his Maryland driver’s license and university ID card. The duo were arrested in December 2019.

They took advantage of Apple’s one-year warranty offer for new iPhones, which allows customers to get a replacement device within that time period if theirs is faulty.

According to court documents, they sent over 5000 counterfeit phones to Apple over the two-year period – shipping the legitimate replacement handsets they received to Hong Kong for onward sale.

Sentencing for the pair will take place on June 21, with each facing a maximum penalty of 20 years behind bars.

A report from 2020 revealed that a fifth of iPhones listed on online marketplaces during the Black Friday weekend showed signs of fraud.