Counterfeit iPhone and iPad scam costs Apple more than $6 million

Scammers who are asking Apple to repair fake iPhones have cost the company $6 million.

The news comes as the latest counterfeit operation was quashed yesterday.

According to the US Attorney Office for the Southern District of California, fourteen people have been charged in what it describes as “the biggest fraud of its kind.”

It involves people importing fake iPhones and iPads from China, before taking them into Apple Stores and asking for them to be fixed.

Apple then would replace the counterfeits with genuine devices.

Once the scammers then had the real devices, they could ship them back to China and sell them for profit.

It’s believed more than 10,000 devices have been imported, exchanged, and sold through the scheme over the years, according to authorities in the United States.

NBC San Diego has reported that Apple has lost over $6.1 million in the scam.

“While a significant amount of money in any circumstance, this prosecution is about more than monetary losses,” U.S. Attorney Robert Brewer told NBC.

“The manufacture of counterfeit goods – and their use to defraud U.S. companies – seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities.

“The United States Attorney’s Office is fully committed to bringing to justice those who seek to damage American markets and consumers through the peddling of bogus products”

Zhiwei Loop Liao, 31, Zhimin Liao, 33, and Zhiting Liao, 30, were the latest behind the Apple counterfeit scheme, US citizens born in China. They were arrested by FBI agents yesterday.

Earlier in the year, a pair of US college students had reportedly made more than $1 million in a similar counterfeit repair scheme, demonstrating the growth of this criminal act.

How do you think Apple should handle these claims in the future? Does the company need to do more to ensure counterfeit iPhones and iPads aren’t replaced or is this water off a duck’s back for the firm? Let us know your thoughts on the subject over on social media.

About the Author

Everything Apple, every day. This post was written by an AppleMagazine newsroom writer.