The Chinese will pay Apple $1 million for its iPhone counterfeiting program

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A US court has ordered a Chinese man to pay Apple $1 million for assembling thousands of fake iPhones to trick the company into sending him real replacement models.

On Thursday, the judge also sentenced 34-year-old Haotian Sun to four years and nine months in prison for the scheme that involved more than 6,000 counterfeit iPhones.

Sun, a resident of Baltimore, Maryland, initiated the scheme in 2017 when he began receiving fraudulent iPhones shipped from Hong Kong. He then provided Apple with counterfeit devices, claiming that the phones were damaged or malfunctioning and needed to be replaced to maintain the product warranty.

To carry out the fraud, the fake devices used out-of-warranty iPhone models that contained counterfeit parts. Sun would also use duplicate serial numbers and IMEI numbers from real iPhones that are still under warranty. “Therefore, when Apple employees conducted an initial inspection of the returned phones, the spoofed numbers led Apple to believe that these were legitimate iPhones that were under warranty and therefore eligible for iPhone replacement,” a U.S. researcher wrote in the magazine. mail 2019, describing the crime.

The court document suggests that defrauded Apple and its authorized service providers shipped replacements for more than 2,700 counterfeit iPhones. The program continued until late 2019, when investigators arrested Sun. By then, Apple had suffered a loss of over $2.5 million.

In February, a federal grand jury finally indicted Sun and his accomplice, another Chinese national, Pengfei Xues. On Thursday, a U.S. district court also sentenced Xue to more than four years in prison, ordering him to pay $397,800 in restitution to Apple. The judgment also requires Sun to forfeit $53,610 and Xue $19,890.