WASHINGTON, D.C. (Oct. 3, 2024) — Two foreign nationals have been sentenced for orchestrating a scheme to defraud Apple Inc. out of more than $2.5 million by submitting counterfeit iPhones for warranty replacements. Haotian Sun, 34, and Pengfei Xue, 34, both Chinese citizens residing in Maryland, were sentenced on Wednesday after being convicted of multiple fraud-related charges.
Sun, who lived in Baltimore, was sentenced to 57 months in prison, three years of supervised release, and ordered to pay $1,072,200 in restitution to Apple, along with a forfeiture money judgment of $53,610. Xue, a Germantown resident, was sentenced to 54 months in prison, three years of supervised release, and ordered to pay $397,800 in restitution, with an additional forfeiture judgment of $19,890.
Court documents revealed that between May 2017 and September 2019, Sun and Xue, along with co-conspirators, imported counterfeit iPhones from Hong Kong to the Washington, D.C. area, using UPS mailboxes. They then submitted these inauthentic devices to Apple stores and authorized service providers, swapping them for genuine iPhones. In total, the conspirators submitted more than 6,000 fake phones, causing Apple significant financial losses.
“This case sends a strong message to those who think they can exploit the system for personal gain,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri. “We will hold accountable anyone who engages in such brazen fraud.”
The scheme unraveled after both men were convicted in February following a five-day jury trial. Sun was found guilty of one count of conspiracy to commit mail fraud and one count of mail fraud, while Xue was convicted on six counts of mail fraud.
“This was a meticulously planned and executed operation that spanned several years, causing substantial harm to a major U.S. company,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “Their actions had consequences, and today justice has been served.”
The case was investigated by the U.S. Postal Inspection Service (USPIS) and Homeland Security Investigations (HSI), with prosecution led by Trial Attorney Ryan Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kondi Kleinman for the District of Columbia.
