Earlier this year, a pair of college students in Oregon were arrested and charged with running a counterfeit iPhone return scam. Now, one of those two has pleaded guilty to the charges, and faces a maximum penalty of up to 10 years in prison.
Quan Jiang has declared a guilty plea in court (via AppleInsider), following the charges placed against him. The U.S. Attorney’s Office for the District of Oregon has constructed a solid case, stating that Quan Jiang received packages from China that included fraudulent iPhones inside. Between January 2016 and February 2018 Quan Jiang received these packages at regular intervals, each of which could include up to 30 inoperable, counterfeit iPhones inside.
After receiving those iPhones, Quan Jiang would then turn around and, using fake names, submit those devices for a warranty exchange through Apple. Quan Jiang did this both online, and by visiting the three official Apple Stores located within the state of Oregon. According to the charges, Quan Jiang imported over 2,000 counterfeit iPhones over the years. He received somewhere around 1,500 authentic iPhones in return.
On the Chinese resale market, that earned Quan Jiang around $600 per device. He was not paid directly by his associates in China, however. They actually paid his mother, who still lives in China, and who would then transfer the money to Quan Jiang in the United States. According to Apple, the fraudulent scam has an estimated impact of $895,800 on the company.
Quan Jiang has a hearing scheduled for August 28 of this year. He is facing a maximum penalty of up to 10 years in prison, a fine of up to $2,000,000 or twice the illegal proceeds earned (whichever is higher), and up to three years of supervised release. However, Quan Jiang has already agreed to pay Apple $200,000, and that could reduce the overall judgment placed against him.
Another student was also associated with the counterfeit scam. Yanyyang Zhou was arrested back in April along with Quan Jiang. However, at the time of publication, it’s unclear what is happening with that student.
This is a pretty crazy story, especially for how long it went on and just how much the students were able to take away from Apple during that stretch.