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China sentences 14 people in plot to convert US iPhones for Chinese networks

A court in the Chinese city of Zhengzhou has reportedly sentenced 14 people for hacking into a Foxconn database to steal digital identity certificates, in turn used to convert U.S. iPhones for Chinese networks.




Eight of the people were former Foxconn workers, said the Wall Street Journal, quoting China's government-run Legal Daily. Together, the group converted roughly 9,000 iPhones purchased in the U.S. and made over 3 million yuan ($468,750) within a five-month span between late 2011 and early 2012.

The profit potential in the crime stemmed from the disparity between U.S. and Chinese iPhone prices. Whereas an unlocked current-generation iPhone starts at $649 in the U.S., it costs 5,288 yuan ($825) in China, and there can be even more profit potential for used or subsidized models.

With the help of people inside Foxconn, the group managed to steal iPhone serial numbers and then hack into the certificate system to make needed changes. The altered certificates were then used to activate the American iPhones.

Foxconn only learned of the fingerprints in its database some five months after the fact, at which point it notified police. It's not clear why there was a three-year delay between arrests and sentencing, and the Legal Daily would only say that the verdict was issued "recently."

Foxconn has regularly had trouble with porous security in relation to Apple products. Workers have leaked both parts and specifications, the latter of which can be particularly valuable for Chinese accessory makers looking to get a jump on the competition. A number of people have been arrested and/or convicted in recent years.