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Students Accused of Tricking Apple into Giving Them $1M Worth of iPhones

Apple reported its profit climbed 19 percent to $10.7 billion, as iPhone sales grew in a stronger-than-expected update for the past quarter
FRED DUFOUR/AFP
TOM CICCOTTA

Two Oregon college students have been accused of tricking Apple into sending them $1 million worth of iPhones.

According to a report from the Guardian, two Oregon students allegedly concocted a scheme that resulted in Apple sending them nearly $1 million in iPhones. The students allegedly sent Apple hundreds of counterfeit iPhones, telling the company that they were broken. Apple would then send back a legitimate replacement device.

The criminal complaint against students Yangyang Zhou and Quan Jiang provides details on how the scheme was operated. An investigation into the students revealed international transactions for devices that had been declared counterfeit by Apple.

The scheme is perpetrated by an individual who submits a counterfeit iPhone that will not power on, and receives a new and/or factory refurbished officially licensed iPhone in exchange for the non-working phone through Apple’warranty and repair process. This is done online and through the mail. The submitter then ships the legitimate iPhone to a broker or organizer, often located overseas, who sells the replacement iPhone-typically for hundreds of dollars-and returns a portion of the proceeds to the person who submitted the fraudulent warranty claim. As part of this particular investigation, CBP in Portland, Oregon, has seized more than five shipments originating from China and imported from Hong Kong containing iPhones that have been declared counterfeit by the trademark holder, Apple.
According to the report, the students sent 3,069 counterfeit devices to Apple for repair. Nearly half of the devices sent were replaced with legitimate iPhones. The rest were marked by Apple technicians as “tampered with,” meaning that technicians believed that the phones had been damaged in a way that violated the warranty. None of the phones were recognized by technicians as counterfeit. The students then, allegedly, sent the legitimate iPhones back to China where they were sold for a profit. The total value of the 1,493 iPhones they received from Apple is approximately $895,800. 
Stay tuned to Breitbart News for more updates on this story. 

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