Counterfeit iPhone trafficking scheme lands Chinese national in US federal prison

Posted:
in General Discussion edited October 2019
A Chinese national was sentenced to 37 months in federal prison and three years' supervised release on Tuesday for his part in a counterfeit iPhone trafficking scheme that defrauded Apple out of an estimated $900,000 in warranty replacements.

Fake iPhones
Boxes of counterfeit iPhones found at Jiang's home. | Source: U.S. Attorney's Office via KOIN


Today's sentencing of Quan Jiang, 30, comes more than a year after the former Linn Benton Community College engineering student pleaded guilty to one count of trafficking in counterfeit goods in April 2018, according to a statement from the U.S Attorney's Office for the District of Oregon.

Earlier this year, Jiang and former Oregon State University engineering student Yangyang Zhou were fingered by federal agents investigating a counterfeiting scheme involving Apple's hardware warranty policies. Both Jiang and Zhou carried out the illicit plan while in the U.S. on student visas.

Between January 2016 and February 2018, Jiang would regularly receive inoperable counterfeit iPhones -- 20 and 30 at a time -- from connections in Hong Kong and send the hardware to Apple, or carry it in to a brick-and-mortar store, for warranty replacement. Genuine articles were sent back to China for subsequent resale. Profits gleaned by the operation delivered to Jiang's mother, who deposited the funds into Jiang's Chinese bank account, the release said.

Law enforcement officials were made aware of Jiang's dealings in April 2017, when U.S. Customs and Border Protection seized a shipment of 28 iPhone 6 handsets addressed to the then-student. Another package containing 25 iPhone 7 Plus units was confiscated six months later. The CBP sent notices of seizure for both shipments, while Apple reportedly issued two cease-and-desist letters in June and July of 2017. Despite the warnings, CBP seized three additional shipments containing 29 iPhones each in November of that year.

Jiang previously denied receiving the notices from the CBP and Apple, but later admitted that he knew the imported iPhones were counterfeit and that seeking hardware replacements was illegal, the U.S. Attorney's Office said.

In all, Jiang imported more than 2,000 counterfeit iPhones during the two-year span, some 1,500 of which were traded in for replacements that carried a value of approximately $600 apiece.

It is unclear whether Zhou faces similar charges for his role in the operation.

Comments

  • Reply 1 of 12
    sflocalsflocal Posts: 5,517member
    Good.  I'm sure that guy was ready to flee back to China if he got wind of what was coming down.  Do I think China will do the right thing and arrest the people in Hong Kong as well?  Doubt it.
    elijahg
  • Reply 2 of 12
    lkrupplkrupp Posts: 8,999member
    I wonder how many of those ranting and raving here and on other sites over problems with their “iPhone” are actually using a fake one. 
  • Reply 3 of 12
    He should’ve gotten 20 years in a Federal penitentiary.
    macseekermwhiterepressthis
  • Reply 4 of 12
    Thats it ? 37 months only??? Thats a slap in the wrest....
    mwhiterepressthis
  • Reply 5 of 12
    SoliSoli Posts: 10,026member
    Kuyangkoh said:
    Thats it ? 37 months only??? Thats a slap in the wrest….
    Thirty-seven months for stealing 1,500 iPhones? That's not just a slap on the wrist, that's practically a shake to undo.

    That's well under 1 day per fraudulent iPhone.
    urahararepressthis
  • Reply 6 of 12
    sflocalsflocal Posts: 5,517member
    Soli said:
    Kuyangkoh said:
    Thats it ? 37 months only??? Thats a slap in the wrest….
    Thirty-seven months for stealing 1,500 iPhones? That's not just a slap on the wrist, that's practically a shake to undo.

    That's well under 1 day per fraudulent iPhone.
    Yeah, but now... he won’t finish school here, will have a record, and will most likely be deported after he’s released.  So good luck getting a good job outside China.
    repressthis
  • Reply 7 of 12
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    Counterfeit iPhones run Android.
  • Reply 8 of 12
    Counterfeit iPhones run Android.
    That’s why they don’t work ;)
  • Reply 9 of 12
    laytechlaytech Posts: 226member
    Scum bag. Thieves just cost everyone else as does all levels of fraud, whether insurance or otherwise. Greed is the biggest root of evil. What goes around will come around... I hope!
  • Reply 10 of 12
    Imagine if three years in prison for every $900,000 in fraud had been applied to bank and financial company executives back in the global economic meltdown...
    repressthis
  • Reply 11 of 12
    linkmanlinkman Posts: 1,002member
    Maybe Apple is reconsidering its decision to not put the serial number on the iPhone enclosure now?
  • Reply 12 of 12
    MplsPMplsP Posts: 2,934member
    sflocal said:
    Good.  I'm sure that guy was ready to flee back to China if he got wind of what was coming down.  Do I think China will do the right thing and arrest the people in Hong Kong as well?  Doubt it.
    No - the Chinese will celebrate his industriousness and cheating spirit. 

    It kind of sucks - we (the tax payers) no have to pay $30+k per year to keep this guy incarcerated. He’ll be deported in the end but it will cost us in the mean time. Of course If they simply deported him he’d be free as soon as he got off the plane. 
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