Two Individuals Convicted in Multi-Million Dollar Scam Against Apple Inc.

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Federal Jury Convicts Two in Apple iPhone Fraud Case

In a significant legal development, two individuals, originally from China, were found guilty by a federal jury in the District of Columbia. They were found to be involved in an intricate scheme aimed at defrauding Apple Inc. by submitting over 5,000 counterfeit iPhones, resulting in an intended loss exceeding $3 million for the tech giant.

Court documents and evidence presented during the trial revealed that from May 2017 to September 2019, Haotian Sun (also known as Hao Sun, Jack Sun, and Frank Sun), aged 33 and residing in Baltimore, Maryland, alongside Pengfei Xue, also 33 and from Germantown, Maryland, collaborated with co-conspirators in this fraudulent operation. Their modus operandi involved dispatching fake iPhones to Apple under the pretense of repair, seeking authentic replacements in return. Sun and Xue orchestrated the receipt of counterfeit iPhones from Hong Kong, directing them to various UPS mailboxes across the D.C. Metropolitan area. These fraudulent devices, often bearing altered serial numbers or IMEI numbers, were then presented at Apple retail outlets and authorized service providers.

In 2017, Sun utilized his Maryland driver’s license and university identification card to establish eight UPS Store mailboxes. The arrests of Sun and Xue were effected by U.S. postal inspectors in December 2019.

The jury found Sun and Xue guilty on charges of mail fraud and conspiracy to commit mail fraud. Scheduled for sentencing on June 21, both individuals face a maximum prison term of 20 years. The final sentence will be determined by a federal district court judge, who will consider various factors including the U.S. Sentencing Guidelines.

Acting Assistant Attorney General Nicole M. Argentieri from the Justice Department’s Criminal Division, U.S. Attorney Matthew M. Graves for the District of Columbia, Inspector in Charge Damon Wood of the U.S. Postal Inspection Service (USPIS) Washington Division, and Special Agent in Charge Derek W. Gordon of the Homeland Security Investigations (HSI) Washington Field Office jointly announced this outcome.

The case was investigated by USPIS and HSI.

Trial Attorney Ryan Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section, along with Assistant U.S. Attorney Kondi J. Kleinman for the District of Columbia, are handling the prosecution of this case.

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