Two Chinese students in the US state of Oregon allegedly duped Apple out of nearly $1 million in iPhone replacements and are now undergoing trials in a federal court against criminal charges.
The scam began in 2017 when engineering students Yangyang Zhou and Quan Jiang started smuggling fake copies of iPhones from China to the US, The Verge reported on Thursday.
Later they would send the iPhones for repair or replace, claiming that their (fake) devices were not switching on, the report cited The Oregonian to say.
In many cases, Apple replaced the fake goods with real iPhones, which cost the company an estimated $895,800, the report said.
The real iPhones that came in replacements would then be shipped to China.
Jiang allegedly submitted 3,069 warranty claims and Apple granted 1,493 replacement iPhones as a result and lost nearly $900,000 from this scheme.
According to federal complaints, both Jiang and Zhou claim they did not know the phones were fake, the report added.
While Zhou is being accused of illegally exporting goods, Jiang is facing charges on illegally trafficking in copied goods and committing wire fraud, the report noted.
Even though both the accused remain out of custody, Jiang, who was accused back in 2018, is being monitored by GPS.
Last year, a Chinese national living in New Jersey on a student visa pled guilty to selling fake iPhones and iPads, pocketing $1.1 million in sales revenue from the scheme.