In a significant ruling, a federal jury convicted Haotian Sun, 33, and Pengfei Xue, 33, both Chinese nationals, for orchestrating a sophisticated mail fraud scheme that defrauded Apple Inc. of millions. The U.S. District Court in Washington, D.C., handed down the verdict this week, confirming their participation in a complex conspiracy involving counterfeit iPhones. These two Maryland-based fraudsters who defrauded Apple of $ 2.5 million were sentenced to prison yesterday and ordered to pay restitution. One received a 57-month sentence, while the other was sentenced to 54 months. Together, they were ordered to repay nearly $1.5 million in restitution.
Sophisticated iphone fraud scheme uncovered
Between May 2017 and September 2019, Sun, of Baltimore, and Xue, of Germantown, Maryland, executed a well-coordinated operation targeting Apple’s repair and exchange system. The pair, along with other conspirators, imported counterfeit iPhones from Hong Kong to various UPS mailboxes across the D.C. area. They then used these fake devices, manipulating serial and IMEI numbers, to trick Apple’s repair centers, including the Georgetown Apple Store, into exchanging them for authentic iPhones.
In total, over 5,000 inauthentic phones were submitted during the scheme, resulting in an intended loss exceeding $ 2.5 million to the tech giant. The fraudulent submissions were carefully organized, with the conspirators using various aliases and disguising their actions to avoid detection.
Legal proceedings and sentencing
Sun and Xue were arrested on 5 December, 2019, following an extensive investigation by the U.S. Postal Inspection Service and Homeland Security Investigations. Both were found guilty of conspiracy to commit mail fraud and mail fraud, crimes that carry a statutory maximum sentence of 20 years in prison.
Source: US department of Justice
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