Two Maryland men have been sentenced to federal prison for defrauding Apple Inc. in a large-scale scheme. The men used fake iPhones to trick Apple into giving them genuine replacements, netting millions in fraudulent gains.
Haotian Sun, 34, and Pengfei Xue, 34, received prison sentences of 57 months and 54 months, respectively. A jury convicted them in February 2024 of mail fraud and conspiracy to commit mail fraud.
The Scam: How They Exploited Apple’s Replacement Program
From May 2017 to September 2019, Sun and Xue submitted fake iPhones to Apple for repair. They aimed to get real replacements by using counterfeit phones with fake serial numbers. The fake devices came from Hong Kong, and they were mailed to UPS boxes in the Washington D.C. area.
Once they received the real iPhones from Apple, Sun and Xue sold them for profit. They targeted multiple Apple stores, including the Georgetown location. In total, the men submitted over 6,000 fake phones, causing more than $2.5 million in losses.
Sentencing and Financial Penalties
In addition to prison time, both men must repay a portion of the stolen funds. Sun has been ordered to pay $1,072,000, and Xue will pay $397,800. Both men will also serve three years of supervised release after their prison terms.
The Federal Investigation
Federal investigators from the U.S. Postal Inspection Service and Homeland Security tracked the pair’s actions. Their work led to the arrests and eventual sentencing. U.S. Attorney Kondi J. Kleinman and Trial Attorney Ryan Dickey prosecuted the case.
This scheme is one of the largest frauds Apple has faced, highlighting the challenges companies encounter when fighting financial crimes.
A Warning to Would-Be Fraudsters
This case sends a strong message. Exploiting companies like Apple for financial gain can lead to serious consequences, including prison and large financial penalties.
