MD Men Convicted In Scheme To Defraud Apple Out Of 5,000 iPhones

GERMANTOWN, MD — Two Maryland residents were found guilty by a federal jury on Tuesday of participating in a scheme to defraud Apple Inc. out of millions of dollars’ worth of iPhones, according to the U.S. attorney’s office.

Haotian Sun, 33, of Baltimore and Pengfei Xue, 33, of Germantown were found guilty of conspiracy to commit mail fraud and mail fraud, which carry a statutory maximum sentence of 20 years in prison.

U.S. District Court Judge Timothy Kelly scheduled sentencing for both Sun and Xue on June 21.

According to the government’s evidence, between May 2017 and September 2019, Sun, Xue and others defrauded Apple by submitting counterfeit iPhones to Apple for repair to get Apple to exchange them with genuine replacement iPhones.

Sun and Xue received shipments of inauthentic iPhones from Hong Kong throughout the Washington, D.C. area. They then submitted the fake iPhones, with spoofed serial numbers and/or IMEI numbers, to Apple retail stores and Apple Authorized Service Providers, including the Apple Store in Georgetown, according to the government’s evidence.

Trial evidence showed that the defendants submitted more than 5,000 inauthentic phones to Apple during the conspiracy, intending to cause a loss of more than $3 million to Apple.

Sun and Xue, who used various aliases during the scheme, were arrested on Dec. 5, 2019.