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Chinese customs officials bust $80M drone-based iPhone smuggling ring

A smartphone smuggling ring has been broken up by Chinese customs officials, one where a gang used a fleet of drones to transport approximately 500 million yuan ($79.8 million) worth of refurbished iPhones across the border from Hong Kong to Shenzhen.

Shenzhen customs officials believe the ring's activities to be the first case in China where drones were used for cross-border smuggling, according to the Legal Daily report seen by Reuters. A total of 26 suspects have been arrested by authorities in the crackdown.

Rather than use the drones to carry the iPhones directly, they were instead used to fly the ends of two 200-meter (660 feet) cables across the border to operatives on the other side. After each successful flight, the cables would be used to drag small bags, each containing more than 10 iPhones, across the border.

Once the cables were secure, gang members needed only seconds to transfer the bag across the border. Estimates by officials suggest the gang were capable of smuggling as many as 15,000 devices in one night using the technique.

China has already implemented strict rules for drone usage, with regulations requiring owners to register craft under their real names, in an attempt to cut down on incidents where drones stray into commercial flight paths.

Shenzhen custom officials advised they will be keeping an eye on new smuggling methods using similar devices in the future, and aim to improve their own detection capabilities with the increased use of drones and other technology.

Prices for the iPhone can vary greatly between the China mainland and Hong Kong, with devices costing up to 30 percent more due to taxes and other levies. The price disparity and the popularity of iPhones makes smuggling of the smartphones a potentially lucrative activity for some criminals.

In July last year, a woman was arrested by Shenzhen Louhu customs officials, for attempting to smuggle 42 pounds of contraband from Hong Kong to mainland China. Discovered by unusual bulges and strange body proportions, officials discovered the woman had wrapped four layers of iPhones around her body, hidden under her clothes.

The woman was carrying a total of 102 iPhones and 15 high-end watches, which turned out to be a record arrest for the officials. Normal smuggling attempts carried "less than a dozen" iPhones into the country, though periodically people would attempt to get past officials with 70 to 80 concealed devices.