Apple

$1M iPhone repair scam leads to prison sentence, and almost $2M in penalties

A $1M iPhone repair scam running for more than three years has led to a Chinese man receiving a prison sentence, and being asked to pay almost $2M in restitution and penalties.

Using a method that has been used by other fraudsters, Haiteng Wu tricked Apple into accepting “returns” of counterfeit iPhones and replacing them with real ones …

The approach took advantage of the extremely convincing iPhone fakes available in China. While these run a version of Android, they were rendered inoperable so that they failed to power up. They were given fake serial numbers and IMEI numbers in order to clone the identity of genuine iPhones that were still under warranty.

To an Apple Store employee, the phone would look real, and it would show up in their database as being under warranty. When they were unable to power it up, they would replace it with a genuine iPhone.

The Department of Justice said that Wu was sentenced yesterday – though immediately released as he had already served 26 months in prison while awaiting trial.

Haiteng Wu, 32, of the People’s Republic of China, was sentenced today to serve 26 months in prison for participating in a three-year conspiracy to defraud Apple Inc. out of more than $1 million […]

Wu pleaded guilty in May 2020, in the U.S. District Court for the District of Columbia, to one count of conspiracy to commit mail fraud. Today, the Honorable Emmet G. Sullivan sentenced Wu to the time he already has served in custody, which amounts to approximately 26 months.

He also ordered Wu to pay $987,000 in restitution and an identical amount in a forfeiture money judgment. Judge Sullivan previously ordered Wu to forfeit his interests in two condominium units, one in McLean, Virginia, the other in Arlington, Virginia. Wu purchased the Arlington condominium for cash during the conspiracy.

According to publicly filed court documents, Wu immigrated to the United States in 2013 to study engineering. After earning his Master’s Degree in 2015, he secured lawful employment in the United States, but then embarked on a roughly 3 ½-year-long scheme to defraud Apple.

Two other conspirators – one of them Wu’s wife – also pleaded guilty. She was sentenced to five months, while the third member of the gang is awaiting sentence.

If this $1M iPhone repair scam sounds familiar, it’s because exactly the same method has been used by other fraudsters in the past. A separate $1.1M fraud saw fake Apple devices imported from China for resale in the US.

Photo: Shiwa ID/Unsplash

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