Cyber Crime

14 members indicted for defrauding Apple of millions

Yesterday, federal authorities in the United States charged 14 people for conning Apple of $6 million.

Believed to be members of an international criminal organization, the group was led by three brothers who imported over 10,000 counterfeit iPhones and iPads from China and then went on to exchange them for real devices in Apple stores based both in the US and Canada.

They did this by intentionally damaging the fake devices and claiming the standard warranty Apple has for new genuine devices. To dodge the International Mobile Equipment Identity (IMEI) & serial numbers which are unique to each device, they made sure that the fake devices had such numbers matching those of original devices purchased within Canada and the USA and covered by an Apple warranty.

The question still remains though as to how they obtained these numbers considering that they are not public knowledge.

Bringing their investigative knowledge into action, authorities conducted raids in San Diego, California with the help of 11 search warrants in a couple of businesses and several homes and vehicles seizing $250,000 in cash along with 90 iPhones. However, 3 members are still on the run with warrants out to get them.

Image credit: DoJ

In a press release, US Attorney Robert Brewer stated that,

“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” making the prosecution important symbolically rather than just for the monetary aspect involved.

In conclusion, similar schemes have also been seen before. Most recently 2 Oregon college students earlier this year made nearly a million dollars from engaging in the exchange of fake iPhones for legitimate ones. Yet, such crimes continued, partly because of the persistence found in the perpetrators but also because of Apple failing to take substantial measures to avoid any such future occurrences.

Hence, we leave it to the company and expect them to come up with an additional way of verifying whether an Apple device is indeed legitimate or not relying on a metric other than the IMEI number which seems to be easily forged by such criminals.

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