Entire gang responsible for $16.2 million iPhone return fraud scheme plead guilty

Ending the saga, the last two people involved in a nine year long $16.2 million fake iPhone swap scheme have pleaded guilty in California.

A Justice Department release says that thousands of counterfeit iPhones, iPads, and other Apple goods were returned to Apple Stores as part of the scheme.

Yushan Lin, 31, and Shuyi Xing, 35, both of Corona, California, have admitted their parts in the activities. The pair are the last of six defendants to plead guilty in the case.

Others involved include Wenhui Huang, the leader of the group, and Yang Song, 38, its second in command. Two of those involved are reported to have been in the country illegally.

The release says that Lin's and Xing's plea agreements confirm that they were part of a gang that imported fake Apple devices from China. Counterfeit Apple iPhones, iPads, and other devices were smuggled into the country between December 2015 and March 2024.

It's reported that the defendants visited "stores in Beverly Hills, Sherman Oaks, Pasadena, Irvine, Northridge, Manhattan Beach, Brea, Rancho Cucamonga, Cerritos, and at shopping malls such as The Grove in Los Angeles, South Coast Plaza in Costa Mesa, Fashion Island in Newport Beach, and The Americana at Brand in Glendale."

The fake devices had identification numbers and serial numbers that matched real, Apple-made hardware. This meant that Apple Store personnel were unable to identify them as counterfeit.

Apple Store employees inadvertently gave the defendants new or repaired devices to replace the broken fakes. The replacements were then shipped across the United States or exported to China for profit.

Lin and Xing personally returned or attempted to return more than 1,500 counterfeit devices. As a group, that number rose to almost 21,000 with a value of at least $16.2 million.

The case was investigated by Homeland Security Investigations and IRS Criminal Investigation. The United States Postal Inspection Service and the Los Angeles Police Department were also involved, with US Attorney Andrew M. Roach prosecuting.

Following their guilty pleas, the pair now await sentencing on December 10. Lin faces up to 20 years in federal prison, while Xing could receive up to 40 years.