Leader of $6.1M fake iPhone scam sentenced after swapping 10,000 fake Apple devices for real ones
Last year, two brothers got slapped with a 41-month jail term, while their wives were put on three years' probation. And now, the third brother has also faced the music. Why? Well, they were all tangled up in a scheme involving 10,000 fake iPhones and iPads swapped with real ones at Apple Stores across the US and Canada. Welcome to the wild world of the Liao family!
According to the US Attorney’s Office, Zhiwei “Allen” Liao was given a 51-month prison sentence for his part in leading an international hustle to traffic counterfeit Apple products. Along with jail time, he was told to kiss goodbye to two homes, $120,370 in US cash, and over 200 Apple gadgets nabbed during the investigation.
US Attorney Tara McGrath said in a statement:
Zhiwei Liao then shipped off the legitimately acquired Apple products to China, where they fetched a pretty penny.
While it’s not clear how they got hold of those real serial numbers, having them on the knockoff devices allowed the brothers and their crew to return the fakes to Apple. And, more often than not, Apple replaced them with genuine ones without batting an eyelid. Apparently, the devices would pass an initial examination, at least by non-technical sales staff.
But this isn’t the only rodeo where folks have tried—and succeeded—in pulling off such a stunt with Apple. Recently, two people were found guilty in a $3 million iPhone repair hustle involving over 5,000 iPhones. And if you're curious about what a fake iPhone might look like, check out the iPhone with Android on board that a customer in the UK received not too long ago.
According to the US Attorney’s Office, Zhiwei “Allen” Liao was given a 51-month prison sentence for his part in leading an international hustle to traffic counterfeit Apple products. Along with jail time, he was told to kiss goodbye to two homes, $120,370 in US cash, and over 200 Apple gadgets nabbed during the investigation.
This was a massive, sophisticated fraud that victimized not only Apple, Inc., but thousands of Apple product owners across North America. Theft of intellectual property and the sale of counterfeit goods are growing global problems with serious economic implications.
How exactly the scheme was working, you may wonder? Documents from the court shed some light on how Zhiwei Liao and his brothers, Zhimin Liao and Zhiting Liao, cooked up a scam involving over 10,000 fake iPhones and iPads.
Here’s how it worked: they imported counterfeit iPhones and iPads from China that looked the real deal, complete with ID numbers (IMEI and serial numbers) matching those on actual devices sold in the US and Canada. Then, they’d send their co-conspirators on a tour of Apple Stores across both countries, swapping out the fakes for genuine goods. Apple ended up taking a $6.1 million hit from the scam.
Zhiwei Liao then shipped off the legitimately acquired Apple products to China, where they fetched a pretty penny.
While it’s not clear how they got hold of those real serial numbers, having them on the knockoff devices allowed the brothers and their crew to return the fakes to Apple. And, more often than not, Apple replaced them with genuine ones without batting an eyelid. Apparently, the devices would pass an initial examination, at least by non-technical sales staff.
But this isn’t the only rodeo where folks have tried—and succeeded—in pulling off such a stunt with Apple. Recently, two people were found guilty in a $3 million iPhone repair hustle involving over 5,000 iPhones. And if you're curious about what a fake iPhone might look like, check out the iPhone with Android on board that a customer in the UK received not too long ago.
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