FBI busts $6 million iPhone and iPad counterfeit ring
The FBI busted a counterfeit ring centered on iPhones and iPads that reportedly cost Apple over $6.1 million.
The scheme involved importing more than 10,000 counterfeit iPhones and iPads from China, United States Attorney Robert Brewer said in a press release. The counterfeit devices were intentionally damaged and exchanged at Apple stores for authentic products, which were then shipped to China and other countries and sold at a markup, according to the release.
Genuine Apple (AAPL) iPhones and iPads have International Mobile Equipment Identity (IMEI) and serial numbers that are unique to each device. As part of the scheme, the counterfeit devices were equipped with IMEI and serial numbers that matched those of real devices covered by an Apple warranty in the US or Canada, according to the release.
"The manufacture of counterfeit goods - and their use to defraud US companies - seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities," Brewer said.
Using other people's IMEI or serial numbers is a form of aggravated identity theft, according to the indictment, because the perpetrator "knowingly and without lawful authority, transferred, possessed, and used a means of identification of another person, that is, telecommunication identifying information."
Apple did not immediately respond to a request for comment.
The FBI's investigation took years and spanned across many jurisdictions.
The scheme allegedly involved 14 people who now face dozens of fraud, conspiracy, identity theft and money laundering charges. The FBI arrested 11 people but is still looking for three others.
The release noted that the bust occurred early Wednesday in San Diego, California, where law enforcement seized roughly $250,000 in cash and 90 iPhones that may be counterfeit.
It also noted that the alleged ringleaders, three brothers, were arrested with their wives. The brothers are naturalized US citizens born in China, according to the release from the US Attorney's Office in the Southern District of California. Most of the others allegedly involved are US citizens, naturalized from China, Vietnam and Russia.
Genuine Apple (AAPL) iPhones and iPads have International Mobile Equipment Identity (IMEI) and serial numbers that are unique to each device. As part of the scheme, the counterfeit devices were equipped with IMEI and serial numbers that matched those of real devices covered by an Apple warranty in the US or Canada, according to the release.
"The manufacture of counterfeit goods - and their use to defraud US companies - seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities," Brewer said.
Using other people's IMEI or serial numbers is a form of aggravated identity theft, according to the indictment, because the perpetrator "knowingly and without lawful authority, transferred, possessed, and used a means of identification of another person, that is, telecommunication identifying information."
Apple did not immediately respond to a request for comment.
The FBI's investigation took years and spanned across many jurisdictions.
The scheme allegedly involved 14 people who now face dozens of fraud, conspiracy, identity theft and money laundering charges. The FBI arrested 11 people but is still looking for three others.
The release noted that the bust occurred early Wednesday in San Diego, California, where law enforcement seized roughly $250,000 in cash and 90 iPhones that may be counterfeit.
It also noted that the alleged ringleaders, three brothers, were arrested with their wives. The brothers are naturalized US citizens born in China, according to the release from the US Attorney's Office in the Southern District of California. Most of the others allegedly involved are US citizens, naturalized from China, Vietnam and Russia.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.