February 21, 2024 – WASHINGTON – Haotian Sun, 33, and Pengfei Xue, 33, both Chinese nationals, were found guilty on Tuesday by a federal jury for participating in a sophisticated scheme to defraud Apple out of millions of dollars’ worth of iPhones, announced U.S. Attorney Matthew M. Graves; Acting Assistant Attorney General Nicole M. Argentieri, of the Justice Department’s Criminal Division; Inspector in Charge Damon E. Wood, of the United States Postal Inspection Service (USPIS) Washington Division; and Special Agent in Charge Derek W. Gordon, of Homeland Security Investigations, Washington Field Office.

Sun, of Baltimore, and Xue, of Germantown, MD, were found guilty by a federal jury in U.S. District Court in the District of Columbia of conspiracy to commit mail fraud and mail fraud, which carry a statutory maximum sentence of 20 years in prison. U.S. District Court Judge Timothy J. Kelly scheduled sentencing for June 21, 2024.

According to the government’s evidence, between May 2017 and September 2019, Sun, Xue, and other conspirators defrauded Apple Inc. by submitting counterfeit iPhones to Apple for repair to get Apple to exchange them with genuine replacement iPhones. Sun and Xue received shipments of inauthentic iPhones from Hong Kong at UPS mailboxes throughout the D.C. Metropolitan area. They then submitted the fake iPhones, with spoofed serial numbers and/or IMEI numbers, to Apple retail stores and Apple Authorized Service Providers, including the Apple Store in Georgetown. Trial evidence showed that conspirators submitted more than 5,000 inauthentic phones to Apple during the conspiracy, intending to cause a loss of more than $3 million to Apple.

Sun and Xue used various aliases during the scheme. They were arrested on December 5, 2019. 

This case was investigated by the U.S. Postal Inspection Service and Homeland Security Investigations.

It is being prosecuted by Assistant U.S. Attorney Kondi J. Kleinman, with the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Ryan Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section. Essential work was provided by Paralegal Specialists Sona Chaturvedi, Liliana Villamizar, Mariela Andrade, and Amanda Rohde, as well as former Paralegal Specialist Michon Tart, all of the U.S. Attorney’s Office.

Source: DOJ Release