Two Chinese college students who are accused of sending counterfeit iPhones to Apple, pretending that they were malfunctioning while still under warranty to get brand-new replacements, have cost the Cupertino-based firm nearly $1m in losses. At least that is what US prosecutors claim.
The fraudsters returned close to 1,500 faulty phones to Apple, which the company duly replaced with real, brand-new Apple phones – apparently without realising at the time that the faulty phones were not genuine iPhones.
Quan Jiang and Yangyang Zhou then sent the replacement phones overseas where a third party sold them, paying them a share.
Jiang is charged with wire fraud and dealing in fake goods, while Zhou is charged with providing misleading or false information on export declarations. The latter’s lawyer believes that he will be “vindicated.”
The investigation started two years ago when American customs officers discovered shipments of what seemed to be iPhones (among others). The wrappings and the way that the products were shipped made the officials suspicious. They were all addressed to Zhou.
Jiang and Zhou worked out of neighbouring homes in Oregon.
Apple’s records allegedly show that Jiang can be linked to 3,069 fake iPhone warranty claims – all with the complaint “No Power/Wired Charging Issues.” Apple rejected about half of these claims but accepted the other half.
The two men have US student visas. Both are electrical engineering students studying at US community colleges.
Federal agents stopped Zhou at San Francisco International Airport last year and found a new iPhone on him, which they claim was one of the replacement phones sent by Apple.
Zhou denied their claims, saying that Jiang gave the device to him because he owed him money.