Five Charged in $12 Million Fake iPhone Return Scam Against Apple

TL;DR: Five charged in $12 million fake iPhone return scam, allegedly exchanging counterfeit devices for genuine Apple products 16,000 times over several years.

A massive scam involving fake iPhone returns has cost Apple over $12 million in losses, leading to fraud charges against five individuals.

The Scheme

The scammers would bring near-worthless counterfeit iPhones to Apple Stores, claiming they were faulty and requesting replacement devices. Apple would provide valuable replacement phones, which the scammers then sold. This process was allegedly carried out 16,000 times, resulting in losses of at least $12.3 million for Apple.

International Coordination

The scheme, which ran from December 2014 through March 2024, involved coordination with groups in China that supplied the counterfeit devices. The fake models used stolen identification numbers to appear as genuine Apple products under the AppleCare warranty.

Covering Their Tracks

To avoid detection, the co-conspirators visited numerous Apple Stores across California, sometimes hitting up to ten stores in a single day. They used fake addresses, aliases, and rented PO boxes to conceal their identities.

Potential Consequences

The case is now headed to trial. If convicted, the defendants face years in prison on each of the 22 counts, which include wire fraud, mail fraud, aggravated identity theft, and trafficking counterfeit goods.

This elaborate scam not only defrauded Apple but may have also inadvertently prevented legitimate customers from claiming warranty repairs due to the stolen identification numbers used on the counterfeit devices.

It’s a cautionary tale. Fraudsters grow bolder.