Two men sentenced for $2.5M iPhone fraud scheme against Apple

The US Department of Justice has announced that two men have been sentenced today for defrauding Apple of millions of dollars worth of iPhones.

The first of the men was Haotian Sun, 34. He is a Chinese citizen residing in Baltimore and has been sentenced to 57 months in prison, three years of supervised release, and ordered to pay $1,072,200 in restitution to Apple and a forfeiture money judgment of $53,610.

The second man is Pengfei Xue, 34, who is also a Chinese citizen but residing in Germantown, Maryland. He has been sentenced to 54 months in prison, three years of supervised release, and ordered to pay $397,000 in restitution to Apple and a forfeiture money judgment of $19,890.

Court documents show that over two years, the men submitted counterfeit iPhones to Apple for repair which Apple replaced with genuine devices. The devices were shipped from Hong Kong and carried spoofed serial numbers (IMEI numbers). Those involved in the conspiracy submitted more than 6,000 devices to Apple, causing the company to lose $2.5 million.

The Department of Justice said that Sun and Xue were convicted on February 20 following a five-day jury trial of one count of conspiracy to commit mail fraud. Additionally, Sun was convicted of one count of mail fraud while Xue was convicted of six counts of mail fraud.

The money lost by this fraud is sizable and so is the restitution that the court has ordered. We will probably never know if these two will manage to pay off these significant amounts or what financial means the two men have, however, they are very large amounts and could be difficult sums to repay to Apple.

Source: Department of Justice