Leader of $6.1M fake iPhone scam sentenced after swapping 10,000 fake Apple devices for real ones

Leader of $6.1M fake iPhone scam sentenced after swapping 10,000 fake Apple devices for real ones،

Last year, two brothers were sentenced to 41 months in prison, while their wives were placed on probation for three years. And now the third brother is also facing the music. For what? Well, they were all caught up in a scheme involving 10,000 fake iPhones and iPads exchanged for real ones at Apple Stores in the United States and Canada. Welcome to the wild world of the Liao family!

According to U.S. Attorney's Office, Zhiwei “Allen” Liao was sentenced to 51 months in prison for participating in an international campaign to traffic counterfeit Apple products. In addition to his prison sentence, he was told to say goodbye to two homes, $120,370 in U.S. cash and more than 200 Apple gadgets arrested during the investigation.

U.S. Attorney Tara McGrath said in a statement:

This was a massive and sophisticated fraud that affected not only Apple, Inc., but thousands of Apple product owners across North America. Intellectual property theft and the sale of counterfeit products are growing global problems with serious economic implications.

How exactly did the project work, you might ask? Court documents shed light on how Zhiwei Liao and his brothers, Zhimin Liao and Zhiting Liao, concocted a scam involving more than 10,000 fake iPhones and iPads.

Here's how it worked: They imported counterfeit iPhones and iPads from China that looked like the real thing, with identification numbers (IMEI and serial numbers) matching those of the real devices sold in the US and Canada . Then, they would send their co-conspirators to visit Apple Stores in both countries, swapping the counterfeits for genuine products. Apple ended up taking in $6.1 million from this scam.

Zhiwei Liao then shipped the legitimately acquired Apple products to China, where they made a nice sum of money.

While it's unclear how they obtained these real serial numbers, having them on the counterfeit devices allowed the brothers and their team to return the counterfeits to Apple. And, more often than not, Apple has replaced them with authentic ones without batting an eyelid. Apparently, the devices would pass an initial review, at least by non-technical sales personnel.