A trio of fraudsters who defrauded Apple to the tune of $6 million are now in jail. They ran a sophisticated ring involving counterfeiting Apple iPhone and iPad devices. Incidentally, two of the instigators were sentenced last year.
A US Federal Court not only handed out lengthy sentences but also ordered the defendants to forfeit luxury apartments and multiple Apple devices in their possession.
How was Apple defrauded and tricked into handing out genuine replacements
U.S. District Judge Cynthia Ann Bashant awarded Zhiwei Liao a 51-month sentence for counterfeiting Apple iPhone and iPad devices. His accomplices Zhimin Liao and Zhiting Liao were jailed last year.
All three fraudsters are brothers. They ran an international exchange fraud scheme that relied heavily on Chinese manufacturing.
The Liao brothers, operating from America, imported counterfeit iPhones and iPads from China. These devices weren’t manufactured by Apple’s authorized manufacturers. In other words, a few Chinese counterfeiting companies made these duplicate iPhones and iPads.
These devices wouldn’t power on. However, they did have unique identification numbers (IMEI and serial numbers) that matched those on real iPhones and iPads.
The fraudsters ensured these numbers belonged to devices that were under warranty. Additionally, they were careful to choose only those identification numbers that belonged to devices sold in the United States and Canada.
To pull off the scam, the Liao brothers employed hundreds of “Apple customers”. These mules walked into Apple Stores across the United States and Canada and attempted to exchange counterfeit iPhones and iPads for genuine iPhones and iPads.
As the iPhone and iPad devices wouldn’t power on, Apple couldn’t verify if they were genuine or not. However, Apple Store employees issued replacements as they had genuine identification numbers.
The fraudsters then shipped the genuine Apple iPhone and iPad devices back to China. Another team then sold these devices, presumably at a premium.
How did Apple spot the iPhone and iPad counterfeiting scam?
The Liao brothers successfully operated their scam for several years. However, the US FBI and the San Diego Police Department discovered and investigated the scam, which resulted in 12 felony convictions. Incidentally, this is not the first time Chinese scammers or Chinese companies have defrauded Apple and other smartphone manufacturers.
US court sends Chinese student to 3 years in jail for scamming Apple with fake iPhoness
For more info Visit :https://t.co/RBaFDs6Yzl#applephone #iphone #mobiles #hacking #scam #science #technology pic.twitter.com/wG1bMVVCWL— Tight Slap (@TightSlap1) October 26, 2019
It is not clear how or when Apple caught wind of the scam. However, the investigation agencies, and the US Federal Court, have reportedly ensured the guilty forfeited five residences in San Diego with an estimated value of more than $4.1 million, over $250,000 in cash, and more than 200 Apple products.
While two co-defendants were sentenced to 41 months each back in 2023, the team’s leader, Zhiwei “Allen” Liao, was sentenced to 51 months in prison this week.
