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Sat Apr 6, 2019, 10:41 AM

Two college students are accused of scamming Apple out of $900,000 with fake iPhones

© Provided by CNBC LLC General view of customers at the Apple Covent Garden re-opening and iPhone XR launch at Apple store, Covent Garden on October 26, 2018 in London, England.
Two Oregon college students allegedly managed to scam Apple out of nearly $900,000 through a scheme involving counterfeit iPhones, according to the federal government.


The scam revolved around counterfeit Apple iPhones that were shipped to students Quan Jiang and Yangyang Zhou from "an associate" in China, the government claims. Jiang and Zhou would allegedly submit the fake iPhones to Apple for repair under the company's warranty program and Apple, in many cases, would send them authentic iPhones as replacements. In total, the pair submitted thousands of warranty claims for counterfeit iPhones through the end of 2017, according to complaints filed by the federal government in March 2018 and March 2019.

Jiang, who was reportedly a student at Oregon State University at the time, estimated that he submitted over 2,000 warranty claims in 2017 alone, the government said, and Apple's records show over 3,000 claims in total attributed to Jiang. In every case, Jiang claimed that the iPhones could not be turned on, which turned out to be the crux of the scam, according to the government.

"Submission of an iPhone that will not power on is critical to perpetuating iPhone warranty fraud, as the phone will not be able to be immediately examined or repaired by Apple technicians," and the company will often have to send a replacement iPhone under its warranty policy, the government wrote in its complaint.

While Apple was able to determine that many of the counterfeit iPhones Jiang submitted were not authentic, the company still accepted 1,493 of the phones the student sent in as authentic and provided him with replacement iPhones. At a cost of $600 per iPhone, according to the company's estimates, those replacements resulted in losses of $895,800 for the tech giant, the government said.

https://www.msn.com/en-us/money/companies/two-college-students-are-accused-of-scamming-apple-out-of-dollar900000-with-fake-iphones/ar-BBVFfG2?li=BBnb7Kz&ocid=mailsignout

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Reply Two college students are accused of scamming Apple out of $900,000 with fake iPhones (Original post)
mfcorey1 Apr 6 OP
PoindexterOglethorpe Apr 6 #1
dalton99a Apr 6 #2
mopinko Apr 6 #3
hunter Apr 6 #4
dalton99a Apr 6 #5
hunter Apr 6 #6
elias7 Apr 6 #7

Response to mfcorey1 (Original post)

Sat Apr 6, 2019, 11:21 AM

1. I'm torn between admiring the cleverness and chutspah

of this kid, and wondering why it took Apple so long to wonder about so many phones being sent in for repair.

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Response to PoindexterOglethorpe (Reply #1)

Sat Apr 6, 2019, 11:29 AM

2. Apple knew, and sent them a cease-and-desist letter - twice - in 2017

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Response to PoindexterOglethorpe (Reply #1)

Sat Apr 6, 2019, 12:41 PM

3. right there w ya.

their techs cant spot a fake on sight?

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Response to mopinko (Reply #3)

Sat Apr 6, 2019, 01:16 PM

4. I'd guess they were actual Apple phones, factory rejects perhaps, diverted from the crusher.

There's also a problem with "ghost shift" counterfeiting.

The simplest and most dramatic form of the problem is something that Asia-based investigators jocularly refer to as the "third shift," the "midnight shift," or the "ghost shift." Say a U.S. company orders 20,000 dresses from an overseas factory. The contractor fills the order during its two day shifts but then runs off 10,000 extra at night, possibly using inferior materials. Those he sells out the back door, so to speak, trademark and all.

http://archive.fortune.com/magazines/fortune/fortune_archive/2006/05/01/8375455/index.htm

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Response to hunter (Reply #4)

Sat Apr 6, 2019, 01:32 PM

5. They came from factories in China that manufacture fake iPhones:

https://www.cultofmac.com/495158/impressive-fake-iphone-clone/

Inconsistencies only arose when we took a moment to interact with the phone, which is distributed by a Shenzhen company that calls itself Hdcplayer Technology Co., Ltd and describes itself as a “Phones & Tablet PC Manufacturer.”

It’s so convincing, it passed through a few hands without notice. If it had been only a little better, the owner might have walked away with a $340 check from us.

While this iPhone clone might impress with its good lucks, the tech inside is far from remarkable. In fact, it’s terrible.

Nonetheless, HDCplayer Technology‘s ability to develop its own parts and pack them into a near-perfect iPhone replica proves fascinating.



You’ll see subtle differences between the real iPhone settings on the left and the fake iPhone menu on the right.


Can you identify the iPhone clone? (The fake is on the right.)




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Response to dalton99a (Reply #5)

Sat Apr 6, 2019, 02:15 PM

6. I couldn't find the details of this particular story.

The phones you describe are as much for scammers as they are for people who want to show off their "Apple" phone as a status symbol.

I remember "skins" to make Windows 3.1 look like Windows 95, and later, Windows ME look like XP, or even XP look like Apple.

A quick google search turns up plenty of sites that will tell you how to make your Android phone look like an Apple.

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Response to mfcorey1 (Original post)

Sat Apr 6, 2019, 07:57 PM

7. Why can't people just be f***ing honest?

Use your ingenuity for something bigger than yourself

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