An iPad and iPhone fraudster who is estimated to have cost Apple more than $6M in replacement devices has been sentenced to 51 months in prison.

His two co-defendants were sentenced to 41 months each back in 2023. The trio also had property and cash seized to the value of more than $4M …

The scam was a sophisticated one. The team purchased non-functional but extremely convincing counterfeit iPhones and iPads in China, which were given the serial numbers of genuine products sold by Apple in the US.

They then hired hundreds of people to take the fake products into Apple stores, claiming that they wouldn’t power up. When Apple found the devices dead and checked the serial numbers, they matched products under warranty, so issued replacements. Those genuine devices were then sent back to China and sold.

This is the same method used in a previous fraud, worth an estimated $1M.

All three of the instigators were brothers, and two of them were previously sentenced to 41 months in prison. Patently Apple reports that the third and final one has now been sentenced.

Zhiwei “Allen” Liao was sentenced in federal court today to 51 months in prison for his role as an organizer and leader of an international conspiracy to traffic in counterfeit Apple products […]

U.S. District Judge Cynthia Ann Bashant said that a significant prison sentence was appropriate because Zhiwei Liao was the organizer and leader of an extensive international criminal organization that trafficked in counterfeit goods throughout North America for several years.

The scheme was sophisticated and dynamic, involving counterfeit devices imported from China that looked like genuine devices under warranty. Zhiwei Liao micromanaged the operations and created a moving target for law enforcement by directing counterfeit Apple products and criminal proceeds to be sent to different co-conspirators, companies, and family members throughout the scheme. Co-conspirators supported these efforts to avoid law enforcement by exchanging the counterfeit products using a variety of false names and email accounts.

The scheme operated for several years before it was eventually uncovered by a partnership between the FBI and San Diego Police Department.

“Mr. Liao’s sentencing closes a major chapter in a multi-year investigation that exposed an international, elaborate scheme to sell counterfeit goods worldwide,” said FBI San Diego Special Agent in Charge Stacey Moy.

Photo: Apple

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