A group of people defrauded Apple of 2.3 million euros. Apple did not realize for years that they were receiving counterfeit iPhones. Now, two main suspects in the case have been convicted.
The U.S. Department of Justice writes that they have sentenced two men to prison terms who had developed a sophisticated system to defraud Apple.
The group surrounding the two convicted individuals submitted more than 6,000 counterfeit devices to Apple, causing a loss of more than 2.5 million dollars (approximately 2.3 million euros).
Counterfeit devices were connected to real iPhones
How did the fraud work? The fraudsters convinced Apple to accept counterfeit iPhones upon return by falsifying serial numbers or IMEI numbers. At first glance, the devices appeared genuine because the counterfeit data was linked to real devices. Therefore, the return seemed authentic to Apple as they could trace it back to real individuals.
However, a tip led to the unraveling of the fraudsters: The U.S. law enforcement agency intercepted packages and confirmed that thousands of counterfeit phones had been shipped from China and then either submitted for repair via mail or in person at Apple. These counterfeit models were either out of warranty or contained fake parts.
However, Apple mistakenly believed that these must be genuine iPhones with real warranties and replaced thousands of counterfeit devices. Although Apple has implemented measures against such fraud, the fraudsters bypassed them by using aliases and opening new mailboxes.
Almost 5 years in prison and high fines for the fraudsters
How did the case end? The first person was sentenced to 57 months in prison and must pay more than 1 million US dollars in restitution to Apple. The second person was sentenced to 54 months in prison and must pay around 400,000 US dollars in fines. Additionally, both men have to spend three years under supervision.
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