Apple iPhone fraud: Con artist sentenced to over 4 years jail for $6 million scam

According to 9to5Mac, the authentic Apple replacements were then shipped back to China and sold. Prior to this, the brothers had executed a similar scam, pocketing an estimated $1 million. Liao, the chief orchestrator, meticulously managed the operation to evade law enforcement, leading to his extended prison sentence. The scam, which operated for several years, was finally busted by a joint effort between the US investigating agency FBI and the San Diego Police Department. 

The scam involved a detailed and elaborate scheme centered around counterfeit Apple products. Here's a simplified breakdown of how it worked:

Acquisition of Counterfeit Devices: The fraudsters bought highly convincing, yet non-functional, counterfeit iPhones and iPads from China. These fake devices were meticulously crafted to look like the real deal.

Manipulating Serial Numbers: Each counterfeit device was assigned a serial number that matched a genuine Apple product sold in the United States, essentially "cloning" the identity of legitimate devices still under warranty.

Recruiting Individuals for Returns: The group then recruited hundreds of people to act as ordinary customers. These individuals were tasked with taking the counterfeit devices into Apple stores, pretending to be genuine customers facing issues with their products.

Exploiting Apple's Warranty Policy: When these fake devices were presented at Apple stores, they wouldn't power on, prompting staff to check their serial numbers. Finding that the serial numbers matched those of products under warranty, Apple, following its policy to ensure customer satisfaction, replaced the counterfeit items with genuine Apple products.

Export and Sale of Genuine Products: The genuine replacements issued by Apple were then smuggled back to China. Once there, they were sold as new, genuine Apple products, generating significant profits for the scammers.