By Dean
Two Oregon college students took a $900,000 bite out of Apple — by swapping counterfeit iPhones for the real McCoy.
The swindle revolved around bogus claims that the phones couldn’t be turned on, CNBC reported.
Federal prosecutors allege Quan Jiang and Yangyang Zhou imported more than 2,000 fugazy iPhones from “an associate” in China and then submitted them to Apple for repair under the company’s warranty program, the report said.
When Apple sent the replacements, the students shipped them back to China for resale. The unnamed “associate” fed Jiang’s mother in China a portion of the profits, which she deposited into a bank account that Jiang could access from the US, the report said.
Jiang, who attended Oregon State University at the time, submitted thousands of warranty claims for fake phones through the end of 2017, according to complaints filed by the federal government in March 2018 and March 2019, CNBC said.
Apple determined that many of the counterfeit iPhones Jiang submitted were not authentic, but still agreed to replace 1,493 iPhones at a cost of $600 per phone, the report said. The scam cost Apple a staggering $895,000, the feds said.
The big break in the case came last year when federal agents raided Jiang’s Oregon residence and found over 300 counterfeit iPhones, shipping records, warranty claim submissions, and boxes addressed to Zhou, his alleged accomplice, according to the report.
Jiang faces fines up to $2 million and 10 years in prison for allegedly trafficking in the counterfeit goods and up to 20 years in prison for wire fraud. Zhou, who studied engineering at Linn Benton Community College, faces five years in prison and fines up to $10,000, the report said.
