Five indicted in $12M fake Apple devices fraud case in southern California

A criminal ring operating throughout southern California has been charged with stealing some $12.3 million worth of Apple products by "returning" real-looking counterfeits that didn't work to Apple Stores. The stores would then replace the non-functional clones with genuine iPhones and iPads, which were then shipped overseas.

Five Chinese nationals living in the Los Angeles area were apprehended on May 30th, 2024. Yang Song, Junwei Jiang, Zhengxuan Hu, Yushan Lin, and Shuyi Xing will be tried on charges of aggravated identity theft, conspiracy to traffic in counterfeit goods, and conspiracy to commit wire fraud and mail fraud.

"The defendants are accused of taking advantage of Apple's customer-service policies to steal more than $12 million in merchandise," said United States Attorney Martin Estrada. "Companies should not be victimized and defrauded for being responsive to customer needs, and these federal charges send a message that our office will take decisive action to uncover and prosecute those who perpetrate fraud."

A trial date has not yet been set.

If convicted, the defendants could each face as much as 20 years in prison for each of the conspiracy to commit fraid charges, and up to two years imprisonment for the identify theft charge. They could each also face up to 10 years under the charge of conspiracy to traffic counterfeit goods.

As with previous similar cases, the defendents are alleged to have worked with co-conspirators in China to receive fake Apple products at various locations around southern California. They would then bring the non-functioning devices to various Apple Stores and receive genuine replacement products.

Southern California Apple Stores targeted

The fake Apple products brought in by the group would have identification numbers that matched existing products owned by real people in the US that were still under warranty. In total, the defendants fraudulently returned and attempted to return more than 16,000 counterfeit Apple devices, according to the indictment.

More than 10 different Apple Stores in various parts of southern California were victimized, in areas such as Beverly Hills, Northridge, and Rancho Cucamonga, among others. In many cases, the indictment alleges, the group would visit as many as 10 different Apple stores around southern California in a single day to return counterfeit devices.

A similar crime ring using the same technique in 2019 "returned" over 10,000 China-made fake iPhones, defrauding Apple of an estimated $6.1 million. The leaders were eventually sentenced to between and four and five years in prison.