2nd Man Sentenced to Prison for Defrauding $1 Million from Apple

Chinese Sentenced

A Chinese citizen, Teang Liu, who resides in Alexandra, Virginia, was found guilty and sentenced to prison for participating in a conspiracy to defraud Apple out of more than $1 million. Together with two other Chinese nationals, the Virginia man successfully defrauded Apple by sending out defective fake iPhones and demanding an authentic replacement. According to the criminal complaint, the three defrauded Apple out of more than 2,500 new iPhones and attempted to defraud Apple out of more than 600 additional iPhones.

Liu, who pleaded guilty in February 2021, in the U.S. District Court for the District of Columbia, was sentenced to 12 months and one day of imprisonment for one count of conspiracy to commit mail fraud. In addition to imprisonment, Liu will have to pay $577,780 in restitution and $57,780 in a forfeiture money judgment. Upon release, Liu will be under close supervision for one year, according to the Department of Justice.

Sometime in 2016, Haiteng Wu, who is another citizen of the People’s Republic of China (PRC), recruited Liu. He also recruited his wife, Jiahong Cai, also a citizen of PRC to undertake fraudulent activities. From 2016 to around June 2018, the three Chinese sent defective and inauthentic iPhones to Apple and claimed for replacement. The inauthentic iPhones came from Hong Kong and carried spoofed IMEI and serial numbers that corresponded to those from in-warranty iPhones. After getting the authentic replacement iPhone units, the conspirators then sent them to their contacts overseas, including Hong Kong, to be resold at standard prices.

Liu’s part in the scheme was mainly opening commercial mail agency mailboxes, mostly from UPS stores. Using fake IDs provided to him by Wu, Liu then returned the inauthentic iPhones to various retail stores. He traveled as far as the Rocky Mountains and Florida to carry out the scheme.

The three successfully carried out the conspiracy scheme for years and were found to have gained $1 million in total from defrauding Apple. That is until they were caught in 2019, and they have been detained since then. They all pleaded guilty to their charges in 2020, and their sentence was finally announced this year.

In addition to Liu, Wu was sentenced to 26 months of jail time, while Cai, on the other hand, served five months in D.C. jail and was then ordered removed from the country.

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