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Five Chinese nationals in the Los Angeles area are accused of stealing more than $12 million worth of Apple products from the California-based tech giant through an elaborate counterfeiting scheme that lasted a decade.
In a federal grand jury indictment unsealed on Friday, Yang Song, 40, Junwei Jiang, 37, Zhengxuan Hu, 26, Yushan Lin, 30, and Shuyi Xing, 34, face charges of conspiracy to commit wire fraud and mail fraud, aggravated identity theft and conspiracy to traffic in counterfeit goods.
Prosecutors say the defendants “coordinated with co-conspirators in China” to ship fake Apple products, including iPhones and iPads, to Southern California. Here, the defendants allegedly brought the devices to Apple stores where they would claim they were broken and, through the company’s warranty program, get legitimate replacements.
In some cases, Apple employees would replace the devices on the spot. Other times, the new products would be shipped to mailboxes rented by the defendants, prosecutors said.
“After successfully returning the counterfeit Apple devices for genuine ones, the defendants allegedly shipped the genuine devices to co-conspirators both in the United States and abroad, primarily in China, where the genuine Apple devices were resold at a substantial profit,” the Department of Justice said in a statement.
The counterfeit devices, prosecutors said, included identification numbers that matched real ones and were still covered by Apple’s standard warranty and its extended warranty program.
Among the Apple store locations targeted were Beverly Hills, Sherman Oaks, Irvine, Northridge, Pasadena, Manhattan Beach, The Grove in Los Angeles and South Coast Plaza in Costa Mesa.
“Companies should not be victimized and defrauded for being responsive to customer needs,” said United States Attorney Martin Estrada.
If convicted on all charges, the defendants face a maximum sentence of 30 years in prison.