Apple has lost over $16 million in a large-scale transnational fraud scheme where counterfeit iPhones, iPads, and other devices were returned to Apple stores in Southern California for genuine replacements, federal prosecutors said.
Two Chinese nationals, Yushan Lin, 31, and Shuyi Xing, 35, both of Corona, California, were part of a group that smuggled counterfeit Apple devices into the US. The phony products were designed to appear authentic, with serial numbers matching those of real Apple customers whose devices were under warranty.
From at least December 2015 to March 2024, the fraudsters visited Apple stores in Beverly Hills, Sherman Oaks, Pasadena, Irvine, and other cities, claiming their devices were defective. Apple employees would then repair or replace the counterfeits with genuine devices, which were later shipped to China and resold at a profit.
Lin and Xing attempted to return over 1,500 counterfeit devices, causing at least $1.1 million in losses. Overall, the 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. They are set to be sentenced on December 10, with Lin facing up to 20 years in prison and Xing up to 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 handling the case.
