US students Zhou Yangyang and Jiang Quan accused of cheating Apple out of nearly US$1 million using thousands of fake iPhones from China

Many of us have waited with trepidation in the Apple Store, clasping the broken iPhone we have long since lost the receipt for while the Genius Bar overlords decide whether to take pity on us and give us a new one or show us the gladiatorial thumbs down.

But two Oregon students had rather a lot more riding on Apple’s replacement policy. They allegedly defrauded the company of nearly US$1 million by sending in counterfeit iPhones, claiming they were faulty, and receiving brand-new genuine models as replacements.

A criminal complaint filed last month by federal prosecutors describes a scheme in which the students, Zhou Yangyang and Jiang Quan, who are both Chinese citizens, would receive shipments of thousands of fake iPhones from an accomplice in China. The pair would then send the phones to Apple with fake repair requests, often claiming the phones would not turn on.

Forged iPhones can now be made to be so convincing that even Apple engineers believe they are authentic and so, out of 3,069 repair requests made by Zhou between April 2017 and March 2018, prosecutors claim Apple completed 1,493 of them at a cost of US$895,800. The rest were returned to the pair because Apple engineers believed they had been “tampered” with, invalidating the warranty, although none were recognised by the company as counterfeits.

According to prosecutors, Zhou and Jiang would then mail the real iPhones to China to be sold. Jiang’s mother is named in the complaint – she is alleged to have wired the profits back to Jiang’s US bank account once the iPhones were sold.