Two individuals have been sentenced for their roles in a scheme that defrauded Apple Inc. of millions of dollars worth of iPhones. Haotian Sun, 34, and Pengfei Xue, 34, both Chinese citizens residing in Maryland, received prison sentences and financial penalties as part of their sentencing.

Haotian Sun was sentenced to 57 months in prison and three years of supervised release. He has been ordered to pay $1,072,200 in restitution to Apple along with a forfeiture money judgment amounting to $53,610. Pengfei Xue received a sentence of 54 months in prison and three years of supervised release. He must pay $397,800 in restitution and a forfeiture money judgment of $19,890.

The court documents reveal that between May 2017 and September 2019, Sun and Xue orchestrated the submission of counterfeit iPhones to Apple under the pretense that they were genuine devices needing repair. This led Apple to replace these fake phones with authentic ones. The operation involved receiving shipments from Hong Kong at UPS mailboxes across the Washington D.C., area before submitting the counterfeits at various Apple stores including one located in Washington.

Overall, more than 6,000 fake iPhones were submitted during this period causing losses exceeding $2.5 million for Apple.

On February 20th after a five-day jury trial Sun was convicted on one count each for conspiracy to commit mail fraud and mail fraud itself while Xue faced conviction on six counts related solely toward mail fraud charges.

The announcement came from Principal Deputy Assistant Attorney General Nicole M Argentieri alongside U.S Attorney Matthew M Graves; Inspector Damon E Wood representing USPS Inspection Services' Washington Division; Special Agent Derek W Gordon heading Homeland Security Investigations’ (HSI) local field office who also conducted investigations into this case which saw prosecutions led by Trial Attorney Ryan Dickey together with Assistant US Attorney Kondi Kleinman serving District Columbia’s interests throughout proceedings