The United States Department of Justice (DOJ) announced today that two men have been sentenced to federal prison for orchestrating a complex scheme to defraud Apple Inc. out of millions of dollars worth of iPhones.
Haotian Sun, 34, of Baltimore, and Pengfei Xue, 34, of Germantown, Maryland, both Chinese citizens, were sentenced to 57 and 54 months in prison, respectively.
Additionally, Sun was ordered to pay $1,072,200 in restitution, while Xue was ordered to pay $397,800.
According to the DOJ, from May 2017 to September 2019, Sun and Xue conspired to submit counterfeit iPhones to Apple, aiming to exploit the company’s repair and replacement program.
They received shipments of inauthentic iPhones from Hong Kong at various UPS mailboxes across the Washington, D.C., metropolitan area.
The counterfeit phones, designed to resemble genuine Apple products, had their serial numbers and IMEI numbers altered to match legitimate devices, the DOJ states.
Once modified, the counterfeit phones were submitted to Apple stores and authorized service providers, including a location in Washington, D.C., where the conspirators falsely claimed the devices were malfunctioning and requested replacements.