Author: Rick Rojas / Source: New York Times
Thomas Peter/Reuters
The con was simple: Send a fake iPhone to Apple claiming that the device would not turn on and that it was under warranty, and not long after, a genuine replacement arrived in the mail.
It was a scheme that federal prosecutors said two college students in Oregon repeated on such a scale that it amounted to nearly $900,000 in losses for Apple as they sent in hundreds of counterfeit phones.
The two students, identified as Quan Jiang and Yangyang Zhou, would then ship the iPhones overseas where they would be sold for hundreds of dollars, and in return, they would get a cut of the profit, according to court documents recently filed in United States District Court in Oregon.
The investigation started two years ago, after customs officials seized several shipments coming from Hong Kong containing cellphones from China. The devices appeared to be Apple products, with the logos and design features of an iPhone, but the shipping methods and packaging raised the suspicions of officials who determined that the phones were counterfeit, the authorities said.
Investigators discovered that the cellphones were bound for Mr. Zhou’s mailing address and that they were part of an importing operation that also included Mr. Jiang, Mr. Zhou’s neighbor in Corvallis, Ore., about 85 miles south of Portland.
Records provided to investigators by Apple allowed them to connect Mr. Jiang to 3,069 iPhone warranty claims through his name and his email, mailing and IP addresses. All of them indicated “No Power/Wired Charging Issues” as the reason for the claim.
More than 1,500 of the claims were rejected, but nearly just as many were approved, with a new phone sent out. An Apple representative told an investigator, according to court records, that a key element of the scheme’s success was that the phones were inoperable, which…
The post Scheme to Swap Fake iPhones Adds Up to $900,000 Loss for Apple, Prosecutors Say appeared first on FeedBox.