Two Chinese students studying in Oregon, the US, allegedly scammed Apple out of hundreds of thousands of dollars in iPhone replacements and are now facing criminal charges in federal court, as reported by The Oregonian.
Yangyang Zhou and Quan Jiang are Chinese students who were studying engineering at Oregon State University and Linn Benton Community College on student visas. Outside of classes, they were busy importing fake smartphones from Hong Kong. They sent each iPhone to Apple store either by mail or in person, claiming that their model is not working or doesn’t turn on, to avail a brand new iPhone as part of Apple’s replacement policy “no questions asked”.
The Verge reports that the two college students were so profitable at this scam that it has cost Apple $895,800 in new iPhones, in a time span of two years. Jiang reportedly submitted over 3,000 warranty claims and as a result, Apple granted almost 1,500 replacement iPhones. According to an estimate of $600 per phone, Apple lost nearly $900,000 from this scheme. The duo allegedly shipped the fakes into the US and sent the replacements they got out of the US.
They apparently were terrified when customs officers seized suspicious shipments bearing the Apple logo, the documents noted. The Cupertino tech giant sent Jiang cease-and-desist letters after he was identified as one of the alleged smugglers by December 2017, but later on, they were ignored by customs officials.
It’s interesting to note here how a huge tech company like Apple could allow such a scam. Possibly not being able to turn on the iPhone, Apple employees didn’t verify the authenticity of those iPhones. Also, Apple doesn’t require any proof of purchase for the warranty claim and it looks like Apple employees were just following procedure.