Justice Department Convicts Two People For $3 Million iPhone Repair Scheme

Two people have been found guilty after establishing a "sophisticated scheme to defraud Apple out of millions of dollars' worth of iPhones," confirmed the U.S. Department of Justice.

The U.S. Attorney's Office announced that Haotian Sun and Pengfei Xue were found guilty by a federal jury. Both were charged with conspiracy to commit mail fraud and mail fraud.

Chinese Nationals Found Guilty of iPhone Scheme

In a press release, Sun, Xue, and other conspirators defrauded Apple by submitting counterfeit iPhones to Apple for repair. The fake devices used spoofed serial numbers or IMEI numbers to Apple retail stores and Apple Authorized Service Providers.

According to the evidence, the operation ran from May 2017 to September 2019, wherein they would trick Apple stores into a genuine device replacement. Trial evidence showed that over 5,000 counterfeit iPhones were brought to Apple, causing the loss of more than $3 million.

The report also disclosed that both Sun and Xue used various aliases during the scheme and they bought inauthentic iPhones from Hong Kong. The duo could face up to 20 years in prison and are scheduled for sentencing this June 21.

Apple Keeps Experiencing iPhone Repair Scam

The case of Sun and Xue is not the first iPhone repair scam in the history of Apple. In 2019, 14 people were arrested for importing fake iPhones and iPads from China that were used for the replacement scheme.

Apple estimated a total loss of more than $6.1 million for over 10,000 exchanged devices under the scheme. Meanwhile, in 2022, a $1 million iPhone repair scam was busted leading to the arrest of a Chinese man.

According to the reports, the Apple devices would often look real and convincing enough for a store employee. In addition, the conspirators always find a way to bypass the database and have their devices validated for warranty.

Apple has been experiencing the same case over and over again each year, amounting to millions of dollars in damage. The conspirators also always share the same methods despite being caught.