OREGON – Two Chinese students of Oregon State University and Linn Benton Community college have been accused and sued in a court of law by Apple Corp. Yangyang Zhou and Quan Jiang are accused of tricking the iPhone Manufacturing corporation of giving them iPhones up to $900,000 in worth, which they sent back to China to be sold for profit.
Back in 2017 when the fraud started, both offenders were legal residents of the United States as college engineering students. Records showed both men had arranged for multiple supplies of fake iPhones with an associate in China which they submitted to Apple to redeem warranties with claims that they were original iPhones which wouldn’t turn on.
About half of the phones, which turned up to about $900,000 were replaced by Apple in 2017 and 2018. All of these replaced phones were then sent back to their associate in China who sold them for their real value. The money was then sent back to the United States through Jiang’s mother.
Estimating the value of each phone at $600, the international fraudulent scheme had cost Apple $895,800.
The warranty replacement procedure includes analysis to check its originality by an Apple technician but wasn’t possible since the phones were not coming on.
The first pointer of suspicion was when five cellphone shipments, all fakes which were inbound from Hong Kong were impounded by Customs and Border Protection. In December 2017, Jiang was questioned by Thomas Duffy, an agent of Homeland Security Investigations.
Duffy’s records show Jiang had submitted about 2,000 phone replacement claims in 2017 although he claimed he wasn’t aware they were counterfeits.
In an affidavit, Duffy wrote that Jiang told him he had submitted about 2,000 claims for phone replacements in 2017 alone. However, Jiang maintained that he did not know that the phones he was receiving from China were counterfeit. His colleague, Zhou is accused of over 200 warranty claims to iPhone while three shipments containing 95 fake iPhones in his home.
It was later discovered Jiang paid friends and relatives living in surrounding areas of Corvallis (where he lives) to receive his shipments in order not to draw attention to his address.
Currently, Jiang is facing federal charges for trafficking of counterfeit goods and wire fraud. Punishment for his charges might include 20 years imprisonment for wire fraud and up to $2 million fine and ten years prison term for counterfeit goods trafficking. He is currently not being locked up although he is being monitored by a GPS.
