According to a report by Business Telegraph, two Oregon college students have been accused by federal investigators of scamming Apple for nearly $900,000 by returning fake Chinese iPhones and claiming they were real but broken, to get new replacement iPhones in return.
The two students, who are Chinese nationals Yangyang Zhou and Quan Jiang, were reportedly paid by associates to ship the replacement iPhones received from Apple back to China.
According to the court records, Jiang is now facing federal charges of wire fraud and trafficking in counterfeit goods, while Zhou is charged with submitting false or misleading information on an export declaration. Zhou is also said to have appeared in the U.S. District Court in Portland on Friday, while Jiang is currently out of custody with a GPS monitor:
In a statement, defense lawyer Jamie S. Kilberg said “Mr. Zhou was not aware of any alleged counterfeiting, and we believe Mr. Zhou will be vindicated,”. Jiang told federal investigators he didn’t know the phones were counterfeit, according to court records.
During the alleged scheme, Zhou and Jiang were living in Corvallis, Oregon, on student visas to study engineering — Zhou at Oregon Sciences University, Jiang at Linn Benton Community College, court documents said.
Court records show that Jiang was associated with 3,069 iPhone warranty claims, 100% of which alleged the phone being returned wouldn’t power on. Zhou, on the other hand, was tied to just over 200 iPhone warranty claims.