A Chinese man has been sentenced to 26 months time served in prison for his involvement in a conspiracy 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, an engineering post-graduate residing in McLean, Virginia, 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.
As part of the scheme, Wu and other conspirators received multiple packages containing hundreds of inoperable, counterfeit iPhones from partners in Hong Kong. The phones contained spoofed IMEI numbers and serial numbers that corresponded with authentic in-warranty iPhones.
Using fake names, the conspirators then returned the inauthentic phones to Apple, claiming the “iPhones” no longer worked and should be replaced under warranty. Apple replaced the fake handsets with authentic iPhones, and Wu then shipped back the fraudulently obtained devices to conspirators overseas, including Hong Kong.
Wu recruited others, including his wife, Jiahong Cai, and Teang Liu to participate in the conspiracy, and also procured fake identification documents, used aliases, and opened multiple commercial mail receiving agency mailboxes.
In total, Wu acknowledged defrauding Apple out of nearly $1 million and intending to defraud the company out of even more money. Wu and his conspirators were arrested in December 2019, and Wu has been in custody since.
Wu pleaded guilty in May 2020 to one count of conspiracy to commit mail fraud. On Tuesday, Judge Emmet G. Sullivan sentenced Wu to the time he had already served in custody and ordered him to pay $987,000 in restitution and an identical amount in a forfeiture money judgement.
Like her husband, Cai 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. The case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, and the U.S. Postal Inspection Service.
This isn’t the first time Apple has been duped into replacing hundreds of fake iPhones with authentic handsets through its warranty program. In 2019, Chinese engineering student Quan Jiang was sentenced to three years and one month of imprisonment by a US district judge after he was found guilty of scamming Apple in the same manner, also to the tune of $1 million.