Two Oregon college students from China have been charged for conning Apple out of almost $1 million by returning hundreds of fake iPhones to Apple and selling the iPhones Apple sent back for profit.
Yangyang Zhou and Quon Jiang are both students studying in the United States on legal foreign student visas, according to ABC News. The pair garnered almost $1 million by pretending to return fake iPhones to Apple and claiming they would not power on, whereupon Apple would send them real iPhones which they would sell for profit through a broker (usually overseas, according to a federal complaint filed in U.S. District Court in Oregon).
“Jiang explained that in exchange for his labor and efforts, his associate in China pays Jiang’s mother, who also resides in China, who in tum deposits the proceeds into a [bank] account that Jiang is able to access here in the United States,” the court filing says.
Investigators found that 216 warranty claims were put in by Zhou, while 3,069 claims were put in by Jiang. Apple rejected about 1,600 of the claims but accepted about 1,500, ultimately bringing in about $895,800 for Zhou and Jiang, according to the court filing. The pair would have iPhones shipped to a variety of addresses, including the homes of family members.
An investigation began in 2017 when U.S. Customs and Border Protection tipped off investigators to a shipment of fake iPhones in Portland, according to ABC News.
Zhou was attending Oregon State in Corvallis, Oregon and Jiang was attending Linn Benton Community College in Albany, Oregon. Both students now face prison time if convicted; Jiang, who took the lead in the scheme, faces up to 30 years in jail and $2 million in fines while Zhou could pay up to $10 million in fines and serve five years in jail, according to ABC News.
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