Duo That Cost Apple $2.5 Million in Fraudulent iPhone Repair Scheme Get Prison Sentences

Two Maryland residents who defrauded Apple out of 6,000 iPhones worth over $2.5 million were sentenced to prison today, according to the United States Department of Justice. The duo devised a repair scheme where they sent in counterfeit iPhones in order to get genuine iPhones in exchange.

Chinese nationals Haotian Sun and Pengfei Xue will each spend more than four years in prison. Sun was sentenced to 57 months in prison, while Xue was given 54 months. Both will serve three years of supervised release after their prison terms, and will need to pay restitution to Apple. Sun has been ordered to pay $1,072,000, while Xue has been ordered to pay $397,800.

Between May 2017 and September 2019, Sun and Xue received shipments of inauthentic iPhones from Hong Kong, and used spoofed serial numbers and/or IMEI numbers to return them to Apple retail stores and Apple Authorized Service Providers. Over 6,000 iPhones were submitted to Apple during that two-year period, according to trial evidence. The intended loss was approximately $3.8 million, and actual loss exceeded $2.5 million.

Back in February, Sun and Xue were found guilty of mail fraud and conspiracy to commit mail fraud, charges that carried a maximum sentence of 20 years in prison.