Two Maryland Residents Convicted in Apple iPhone Fraud Scheme
Two Maryland residents were convicted of mail fraud on February 20, 2024, after orchestrating a high-profile scheme that defrauded Apple of thousands of iPhones valued in the millions. The reporting by MacRumors helped bring this case into the public eye.
The individuals identified in court documents are Haotian Sun and Pengfei Xue, both Chinese citizens. They exploited a flaw in Apple’s process for returning defective iPhones by mail. Their operation involved sending fake iPhones that appeared original but functioned poorly. In exchange, they received genuine Apple devices that carried a much higher price tag than the counterfeit units. The deception hinged on exploiting the return mechanism to swap substandard items for top-tier products, enabling substantial profit from the difference in value.
From May 2017 through September 2019, Sun and Xue routinely received counterfeit devices sourced from Hong Kong. Each fake iPhone was assigned a serial number and an IMEI from a legitimate Apple product, and later the placeholders were upgraded to fully functioning Apple smartphones. Over more than two years, the scheme led to the theft of more than 5,000 iPhones, totaling roughly $3 million in fraud against Apple. The breadth of the operation underscores how vulnerable product-return channels can be when verification processes are not tightly enforced across cross-border shipments.
In court, Sun and Xue were convicted of mail fraud and conspiracy. They now face a maximum penalty of up to 20 years in prison, with sentencing details announced on June 21, 2024. The case exemplifies the ongoing efforts of U.S. authorities to disrupt sophisticated smartphone fraud rings that leverage international networks and digital forgeries to siphon high-value devices from major technology companies.
Industry observers note that incidents like this highlight the importance of robust verification procedures for device returns, including cross-checking serial numbers, IMEIs, and purchase histories across international shipments. For consumers, the case serves as a reminder to remain vigilant against counterfeit electronics and to review return policies carefully to ensure proper authentication, especially when engaging in cross-border transactions or purchasing through third-party channels.
As law enforcement continues to pursue those responsible for large-scale device fraud, companies operating in the tech supply chain are pursuing stronger protections against fake items entering circulation. The Sun and Xue case adds to a growing body of enforcement actions aimed at preserving the integrity of consumer electronics and protecting both corporate assets and legitimate customers from financial harm.