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.