Two Chinese nationals living in Maryland have been sentenced for defrauding Apple out of millions of dollars worth of iPhones, according to the U.S. Department of Justice (DOJ). Sun Haotian, 34, of Baltimore, was sentenced to 57 months in prison and three years of supervised release. He was ordered to pay Apple over $1.07 million in restitution and a forfeiture money judgment of $53,610. Xue Pengfei, 34, of Germantown, was sentenced to 54 months in prison and three years of supervised release. He was ordered to pay $397,800 in restitution to Apple and a forfeiture money judgment of $19,890.
Court documents reveal that the men and their co-conspirators devised a scheme to exploit Apple’s one-year warranty policy for new phones. They obtained fake or refurbished iPhones with spoofed serial numbers or IMEI numbers from Hong Kong and submitted them to Apple stores or authorized repair centers so that Apple would replace them with new iPhones.
Between May 2017 and September 2019, the group submitted over 6,000 counterfeit phones to Apple. This caused an intended loss of approximately $3.8 million and an actual loss exceeding $2.5 million.
On February 20th after a three-and-a-half day trial at the U.S District Court in the District of Columbia , Sun and Xue were convicted by a federal jury on charges related to mail fraud as well as conspiracy charges.
Xue is described as a lawful permanent resident who moved to the United States when he was 21 years old with “a history of legal and productive employment” before being recruited into this fraudulent scheme by a co-worker.
Sun arrived in the United States when he was just seventeen years old along with his mother who later married his stepfather employed at The Pentagon . According court documents , Sun is currently out-of-status non-U.S citizen .
Sun submitted at least 3,245 phones for repairs while Xue submitted around half that number . Another alleged conspirator involved managed around half that number again while their handler only managed around one-tenth .
In addition going directly into stores or repair centers , defendants also registered repairs online dropped off phones via multiple UPS mailboxes . Court documents show Xue rented two UPS Store mailboxes created three email accounts recruited supervised other participants .
Sun opened eight UPS mailboxes created multiple email addresses used more than dozen names supervised least one other person .
The court heard on January31st ,2018 postal inspector another government agent spoke Sun after intercepting packages containing counterfeit phones from Hong Kong . Despite this encounter , Sun continued participating until his arrest December2019
In April,Sun’s lawyer filed motion new trial acquittal citing insufficient evidence regarding two specific phones mailed Washington location October3rd ,2018