Apple was scammed of $2.5 million by two men, here is what happened

Cupertino based tech giant Apple is known for its reliability and has the trust of millions of people across the world. Apple offers warranty on all of its products and getting a claim is usually a hassle-free process in case something goes wrong with your product. However, two men living in the US took advantage of Apple’s warranty programme and duped the company of nearly $2.5 million, according to a New York Post report.

Two men scam Apple

The report added that federal authorities described the scam as “sophisticated” and it involved shipping thousands of fake phones to the tech giant under the guise of legitimate warranty claims.

Haotian Sun, 33, and Pengfei Xue, also 33, both originally from China but residing in Maryland, US, masterminded the two-year con that swindled Apple out of an estimated $2.5 million. The Justice Department revealed on Thursday that the men managed to convince Apple that their counterfeit phones were the real deal, running the scam from 2017 to 2019.

Sun received 57 months behind bars and was ordered to pay Apple over $1 million in restitution. Xue, on the other hand, will serve 54 months and owes nearly $400,000 to the company.

How the scam unfolded

According to the New York Post report, Sun and Xue orchestrated a steady flow of fake iPhones from Hong Kong into the U.S. They used spoofed serial numbers to trick Apple and its authorised service providers into believing the devices were still under warranty. Under Apple’s standard one-year warranty, customers can have their iPhones repaired or replaced if something goes wrong. Sun and Xue, however, sent in phones that were either no longer covered or entirely counterfeit.

But that didn’t stop Apple from regularly swapping out the bogus phones for new, genuine ones. The company was replacing dozens of fraudulent devices in single shipments, unwittingly playing right into the scammers’ hands.

To avoid getting caught, the duo used multiple aliases, fake identities, and set up new mailboxes, all in an effort to make their scam look as legit as possible. They hoped that by sending phones from different “people,” Apple wouldn’t connect the dots. It worked—for a while.

How they got caught

The report added that the elaborate scam began to unravel when Apple, suspecting foul play, tipped off federal authorities. A tipster alerted the feds, setting off a series of investigations that eventually lead to Sun and Xue’s downfall. Postal inspector Stephen Cohen detailed how law enforcement started intercepting packages linked to the duo and quickly realised thousands of counterfeit iPhones were flowing into the country.

In a clever move, agents didn’t arrest the men immediately. Instead, they allowed the intercepted packages to continue to their intended destinations, while they quietly documented serial numbers of every single phone. With this evidence in hand, they worked with Apple to trace the shipments and identify the culprits.

Once they had enough proof, the hammer dropped, and the scheme was over.