Two Chinese Men in the U.S. Sentenced to Prison for Exchanging 6,000 Fake iPhones for Genuine Ones

Two Chinese men were sentenced to prison and ordered to compensate Apple Inc. for millions of dollars in losses on Wednesday, October 2nd, for using 6,000 fake iPhones to defraud the tech giant.

According to a press release from the U.S. Department of Justice on Thursday, Sun Haotian, 34 years old, a Chinese citizen residing in Baltimore, was sentenced to 57 months in prison, three years of supervised release, and ordered to compensate Apple Inc. with $1,072,200. Pengfei Xue, also 34 years old and a Chinese citizen residing in Germantown, Maryland, was sentenced to 54 months in prison, three years of supervised release, and ordered to compensate Apple Inc. with $397,800. Additionally, they both had certain amounts of money confiscated.

Court documents and evidence presented in court showed that from May 2017 to September 2019, Sun, Xue, and their accomplices submitted fake iPhones to Apple for repair, with the intention of swapping them out for genuine iPhones.

As part of the scheme, Sun and Xue received the counterfeit iPhones shipped from Hong Kong to UPS mailboxes in the Washington D.C. metropolitan area. They then submitted these fake iPhones, which had forged serial numbers or IMEI numbers, to Apple retail stores (including one in Washington D.C.) and other authorized Apple service providers. The members of the scheme submitted over 6,000 fake phones to Apple during the conspiracy, resulting in over $2.5 million in losses.

In 2017, Sun used his Maryland driver’s license and university student ID to open eight UPS Store mailboxes.

After a five-day jury trial in February of this year, Sun and Xue were both found guilty of conspiracy to commit mail fraud. Sun was also convicted of an additional count of mail fraud, while Xue was convicted of six additional mail fraud charges.

The investigation in this case was conducted by the U.S. Postal Inspection Service and Homeland Security Investigations.