Two college students are accused of scamming Apple out of $900,000 with fake iPhones
© Provided by CNBC LLC General view of customers at the Apple Covent Garden re-opening and iPhone XR launch at Apple store, Covent Garden on October 26, 2018 in London, England.
Two Oregon college students allegedly managed to scam Apple out of nearly $900,000 through a scheme involving counterfeit iPhones, according to the federal government.
The scam revolved around counterfeit Apple iPhones that were shipped to students Quan Jiang and Yangyang Zhou from "an associate" in China, the government claims. Jiang and Zhou would allegedly submit the fake iPhones to Apple for repair under the company's warranty program and Apple, in many cases, would send them authentic iPhones as replacements. In total, the pair submitted thousands of warranty claims for counterfeit iPhones through the end of 2017, according to complaints filed by the federal government in March 2018 and March 2019.
Jiang, who was reportedly a student at Oregon State University at the time, estimated that he submitted over 2,000 warranty claims in 2017 alone, the government said, and Apple's records show over 3,000 claims in total attributed to Jiang. In every case, Jiang claimed that the iPhones could not be turned on, which turned out to be the crux of the scam, according to the government.
"Submission of an iPhone that will not power on is critical to perpetuating iPhone warranty fraud, as the phone will not be able to be immediately examined or repaired by Apple technicians," and the company will often have to send a replacement iPhone under its warranty policy, the government wrote in its complaint.
While Apple was able to determine that many of the counterfeit iPhones Jiang submitted were not authentic, the company still accepted 1,493 of the phones the student sent in as authentic and provided him with replacement iPhones. At a cost of $600 per iPhone, according to the company's estimates, those replacements resulted in losses of $895,800 for the tech giant, the government said.
https://www.msn.com/en-us/money/companies/two-college-students-are-accused-of-scamming-apple-out-of-dollar900000-with-fake-iphones/ar-BBVFfG2?li=BBnb7Kz&ocid=mailsignout
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