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Man Sentenced in $1 Million Fake iPhone Fraud Scheme Case

Man Sentenced in $1 Million Fake iPhone Fraud Scheme Case

A Chinese engineering post-graduate has been sentenced to a 26-month time-served sentence for his part in a conspiracy that attempted to defraud Apple out of more than $1 million by tricking the company into replacing hundreds of fake iPhones with authentic handsets through its warranty program.

Haiteng Wu, 32, immigrated to the United States in 2013 and secured lawful employment, before embarking on the roughly three-and-a-half-year-long scheme to defraud Apple.

The case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, and the U.S. Postal Inspection Service.

Wu and other conspirators received multiple packages containing hundreds of inoperable, counterfeit iPhones from partners in Hong Kong. The phones were equipped with spoofed IMEI numbers and serial numbers that corresponded with authentic in-warranty iPhones.

Under fake names, claimed the devices would not turn on and claimed the devices should be replaced under warranty. Apple replaced the fake iPhones with genuine ones. Wu then shipped back the fraudulently obtained devices to conspirators overseas, including Hong Kong. Each handset has a large value on the Chinese market.

Wu and his coconspirators – which included Wu’s wife, Jiahong Cai, and Teang Liu – also got their hands on fake¬†identification documents, used aliases, and opened multiple commercial mail receiving agency mailboxes.

Wu and his fellow conspirators were arrested in December 2019, and Wu has been in custody since then. Wu acknowledged defrauding Apple out of nearly $1 million and intending to defraud the company out of even larger amounts of money.

Wu pled guilty to one count of conspiracy to commit mail fraud in May 2020. Judge Emmet G. Sullivan on Tuesday sentenced Wu to the time he had already served in custody. Wu was also ordered to pay $987,000 in restitution and an identical amount in a forfeiture money judgment.

Cai also pleaded guilty to mail fraud, and the judge sentenced her to over five months time served following her guilty plea. Liu also pleaded guilty to the same offense and will be sentenced next month.

Wu and his gang are not the first to dupe Apple into turning over real for fake iPhones, In 2019, Chinese engineering student Quan Jiang almost pulled off a similar million-dollar scam, but instead received a three-year and one-month prison sentence.