Apple has been hit by a large-scale iPhone return scam that has cost the company a whopping $12 million. Five individuals have been charged with fraud for their involvement in this elaborate scheme.
The scam involved people bringing in fake iPhone models, which closely resembled the real ones, to Apple Stores. They claimed these devices were faulty and requested replacements. Apple, believing these to be genuine products, provided valuable replacement phones in return. These replacements were then sold for profit.
This fraudulent activity was carried out approximately 16,000 times, leading to losses totaling at least $12.3 million for Apple. The returned devices included thousands of iPhones, iPads, and other Apple devices.
The scam ran from December 2014 through March 2024 and was coordinated with groups in China, where the counterfeit devices were sourced. The fake models used stolen identification numbers that made the phones appear to be real Apple products sold in the US, owned by real people, and under AppleCare warranty cover.
To avoid detection, the co-conspirators visited numerous Apple retail stores across California, sometimes as many as ten stores in a single day. They used fake addresses and aliases, rented PO boxes, and employed other tactics to hide their tracks.
The case is now set to go to trial. If found guilty, the defendants face years in prison on each of the 22 counts, which include wire fraud, mail fraud, aggravated identity theft, and the trafficking of counterfeit goods.
Read more: 9to5mac.com