Fake iPhone and iPad replacement cost Apple more than $6 million, 14 gang members have been indicted

Foreign media reported that 14 members of an international criminal organization suspected of involvement in trafficking in counterfeit iPhones/iPads were indicted on Wednesday. Earlier this year, investigators seized $250,000 worth of advanced and 90 iPhones from local businesses and homes in San Diego with 11 search warrants, the U.S. Attorney’s Office for the Southern District of California said. As part of the raid, a federal grand jury named 14 defendants in the indictment, 11 of whom were arrested on charges of fraud, conspiracy, identity theft and money laundering.

Fake iPhone and iPad replacement cost Apple more than $6 million, 14 gang members have been indicted

(Instagram via Apple Insider)

Xiamon Zhong, one of the three other people involved in the case, Xiamon Zhong, Charley Hsu and Hyo Weon Yang, is believed to be hiding in China.

The indictment says a 14-member gang led by brothers Zhiwei, Zhimin and Zhiting Liao imported more than 10,000 counterfeit iPhone and iPad devices from China.

The fakes were then replaced as genuine in the Apple Store in the U.S. and Canada and shipped to China and other markets for improper gain by criminal gangs.

To succeed, the gang intentionally damaged fake iPhone and iPad devices, which Apple was deemed eligible to participate in warranty replacement. Some of these fake devices have even been replaced with new genuine products from Apple.

It is not known how counterfeit goods have cheated Apple’s after-sales inspection. But the total price of the group’s replacement merchandise has exceeded $6.1 million.

Shockingly, the indictment says the iMEI and serial number of the fake iPhone is the same as the same number of genuine iPhone and iPad hardware purchased and used by customers in the United States and Canada.

Apparently, criminal gangs managed to obtain and falsify the authentic identity of counterfeit Apple mobile devices. Gang masterminds and other participants, most of them U.S. citizens of Chinese origin and later naturalization.

Other defendants were also born in South Korea, Russia, Vietnam and were naturalized to obtain U.S. citizenship. Two others are U.S. citizens, two have legal permanent residency, and a Chinese citizen.

Through the cooperation of the FBI, the San Diego Police Department, The U.S. Customs and Border Protection, the Department of Homeland Security and others, the court finally tried the gang’s members on Wednesday.

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