College students allegedly scammed Apple out of nearly $1M in iPhone replacements

Two Chinese engineering students in Oregon allegedly cheated Apple of hundreds of thousands of dollars in iPhone replacements and now face criminal charges in federal court, as first reported by The Oregonian . The authorities claim that the students obtained a complicated scheme to squeeze Apple's money using counterfeit devices and exploit Apple's return policy.

As of 2017, the two men allegedly smuggled thousands of counterfeit iPhones to the US. UU From China and then they sent them for Apple to repair or replace them, claiming that counterfeits would not be turned on. In many cases, Apple replaced counterfeit products with real iPhones, which cost the company an estimated $ 895,800.

Yangyang Zhou, who just finished his engineering degree at Oregon State University, was allegedly responsible for sending the forged shipments to the US. UU And to send the real iPhones to China. His accomplice Quan Jiang, who studied engineering at Linn Benton Community College, shared an address with Zhou and would bring counterfeit phones to Apple online or in person to request replacements. After the real iPhones were shipped to China to be sold for profit, an associate would send money to Jiang's mother, who then deposited the funds into an account that Jiang used in the US. UU., Explains the complaint.

According to federal complaints, both Jiang and Zhou claim that they did not know that the original phones were counterfeit. Both remain out of custody, but Jiang, who was charged in 2018, is being monitored by GPS. Zhou is being accused of illegally exporting products, while Jiang is accused of illegal trafficking of counterfeit goods and committing electronic fraud.

A National Security agent explained in the complaints that the plan worked mainly because Apple Store employees could not verify authenticity. of the devices since they would not turn on. But Apple's phone replacement process began in the meantime, as the men claimed they were covered by the product warranty. Apparently, Apple did not require proof of purchase to replace the phones.

Jiang allegedly filed 3,069 warranty claims and Apple awarded 1,493 replacement iPhones as a result. With an estimated $ 600 per phone, Apple lost almost $ 900,000 from this plan. In June and July of 2017, Apple sent cease and desist orders to Jiang to the address on Zhou's list, notifying Jiang that Apple knew he was importing fake iPhones. Jiang did not respond to the notices.

The duo is not alone in trying to take advantage of large technology companies. Last year, a Chinese citizen who lived in New Jersey on a student visa pleaded guilty to selling fake iPhones and iPads to customers, and pocketed $ 1.1 million in sales revenue from the plan. And just last month, a Lithuanian man pleaded guilty to defrauding Google and Facebook for $ 100 million by sending them false invoices via email and posing as a Taiwanese hardware company.

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