Two Men Sentenced to Prison for $2.5M iPhone Fraud Scheme Targeting Apple

The United States Department of Justice has revealed that today, two individuals have been sentenced for their role in defrauding Apple of millions of dollars in iPhones.

The first individual, Haotian Sun, aged 34, is a Chinese national living in Baltimore. He has been sentenced to 57 months in federal prison, followed by three years of supervised release, and has been ordered to pay $1,072,200 in restitution to Apple, along with a forfeiture money judgment of $53,610.

The second individual, Pengfei Xue, also 34 and a Chinese citizen residing in Germantown, Maryland, has received a sentence of 54 months in prison, three years of supervised release, and must pay $397,000 in restitution to Apple, in addition to a forfeiture money judgment of $19,890.

Court records indicate that over a two-year period, the duo submitted counterfeit iPhones to Apple for repairs, which were subsequently replaced with genuine devices. The fraudulent devices were shipped from Hong Kong and included spoofed serial numbers (IMEI numbers). Together, they submitted over 6,000 devices to Apple, resulting in a loss of approximately $2.5 million for the company.

The Department of Justice stated that both Sun and Xue were convicted on February 20 after a five-day jury trial on one count of conspiracy to commit mail fraud. Furthermore, Sun was found guilty of one count of mail fraud while Xue faced six counts of mail fraud.

The financial loss incurred through this fraudulent scheme is substantial, as is the restitution mandated by the court. It remains uncertain whether these individuals will successfully repay such significant sums or what their financial situation is; however, the amounts involved are considerable and could pose challenges for repayment to Apple.

Source: Department of Justice

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