Scheme to Swap Fake iPhones Adds Up to $900,000 Loss for Apple

Rick Rojas, reporting for The New York Times:

The con was simple: Send a fake iPhone to Apple claiming that the device would not turn on and that it was under warranty, and not long after, a genuine replacement arrived in the mail. It was a scheme that federal prosecutors said two college students in Oregon repeated on such a scale that it amounted to nearly $900,000 in losses for Apple as they sent in hundreds of counterfeit phones. […]

Records provided to investigators by Apple allowed them to connect Mr. Jiang to 3,069 iPhone warranty claims through his name and his email, mailing and IP addresses. All of them indicated “No Power/Wired Charging Issues” as the reason for the claim.

More than 1,500 of the claims were rejected, but nearly just as many were approved, with a new phone sent out. An Apple representative told an investigator, according to court records, that a key element of the scheme’s success was that the phones were inoperable, which meant the replacement process would begin before technicians could figure out they were counterfeit.

I don’t know how long these guys thought they’d get away with this, but I’d have guessed they’d have been flagged a lot sooner than 1,500 replaced iPhones and 3,000 attempts at the scam.

Tuesday, 9 April 2019