Tech giant Apple lost over $16 million in a large-scale transnational scheme that saw fraudsters in California “returning” counterfeit iPhones, iPads, and other electronics to make a profit.
Yushan Lin, 31, and Shuyi Xing, 35, both Chinese nationals living in Corona, were part of a larger group that smuggled phony Apple devices into the country before bringing them to Apple stores across Southern California to return them, federal prosecutors said.
The counterfeit products were designed to appear authentic, with serial numbers matching those of real Apple customers in North America who had devices covered by Apple warranties.
As part of the scheme, which spanned from at least December 2015 to March 2024, the fraudsters visited Apple stores in Beverly Hills, Sherman Oaks, Pasadena, Irvine, and several other cities to seek help with their device, prosecutors said.
Lin, Xing, and several others involved in the conspiracy would visit the stores and say their devices were defective, prompting the Apple employees to either repair or replace the counterfeits with a genuine Apple device.
The scammers relied on rented mailboxes across Southern California to receive counterfeit shipments. Once they were in their hands, the real Apple devices were shipped to China and resold at a substantial profit, prosecutors said.
Together, Lin and Xing attempted to return over 1,500 counterfeit devices to Apple stores, resulting at least $1,116,544 in losses to the company.
Overall, the larger conspiracy group returned or attempted to return over 27,600 phony devices, costing Apple at least $16.2 million.
Lin and Xing pleaded guilty to conspiracy charges involving wire and mail fraud. Xing also pleaded guilty to an additional count of conspiracy to commit money laundering in connection with a separate money laundering scheme, federal prosecutors said.
They are set to be sentenced on December 10. Lin faces up to 20 years in federal prison, while Xing faces as many as 40 years.
Four other defendants, including ringleader Wenhui Huang, 40, Yang Song, 38, Junwei Jiang, 38, and Zhengxuan Hu, 27, also pleaded guilty and are awaiting sentencing.
Homeland Security Investigations and IRS Criminal Investigation are investigating the case.
