Home / Business / Man Pleads Guilty to Trafficking Fake iPhones in Scheme That Cost Nearly $ 900,000

Man Pleads Guilty to Trafficking Fake iPhones in Scheme That Cost Nearly $ 900,000

Photo: Alex Cranz (Gizmodo)

or trafficking in counterfeit goods in a scheme defrauded by Apple out of roughly 1

,500 iPhones.

According to court records, US Customs and Border Protection opened an investigation in 2017 into a number of shipments of counterfeit iPhones that led them to Quan Jiang. Investigators said, during an interview in December that year, regularly received packages from China that contained 20 to 30 inoperable iPhones, which would then trade in for legitimate iPhones through Apple's warranty program by claiming they would not power on. 19659005] Jiangtan investigators that were trading in the fake iPhones for legitimate Apple products, either in person or online, would ship them back to China where they were sold for hundreds of dollars. In exchange, Jiang would receive a cut of the money. Those funds were reportedly delivered to Jiang's mother, who lives in China and would deposit the money in his account.

Though Jiang used various aliases as well as the names of friends and family to carry out the scheme, Apple's records showed that Jiang appeared to be linked to 3,069 warranty claims either with his name, mailing address, email address, or IP address, according to court documents.

While Apple records showed that 1,576 of those warranty claims were denied, Jiang was still able to obtain 1,493 replacement iPhones from the company. As each replacement phone, Apple is valued at $ 600, the hit to the company up to nearly $ 900,000 in losses.

"Counterfeiting undermines commerce and inevitably leads to increased prices for goods enjoyed by millions of consumers," Billy J. Williams, U.S. Attorney for the District of Oregon, said in a statement. "The investigators who worked this case and others like to provide an invaluable public service to American companies, entrepreneurs, and consumers alike in preserving a competitive market free of criminal interference." 19659005] Jiang faces up to 10 years in price and $ 2 million fine or twice his proceeds, depending on which is greater. He must also pay Apple $ 200,000 in refund as part of his plea agreement. His sentencing is scheduled for late August.

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