Back in April, we reported on the eye-opening scheme involving two Oregon students who somehow exposed Apple’s struggle return policy and scamming the company of nearly a million dollars. Now one of those students has pleaded guilty for his part in the operation.
Quan Jiang, a Chinese national and former engineering student copped to one count of trafficking in counterfeit goods that hoodwinked Apple out of 1,500 iPhones. Jiang spilled the beans to investigators breaking down how he was regularly sent 20-30 broken handsets and then taking them to Apple to trade them in either in person or online for working units claiming they won’t power on abusing the company’s warranty program.
Jiang would then ship the working iPhones back to China where they would be sold for hundreds of dollars and get a cut of the take. The money would be given to his mother where she would deposit the funds into his account. Despite using different aliases to carry out his dubious scheme, according to court documents, Apple noticed that Jiang actually used either his name, email address, mailing address, or IP address on 3,069 warranty claims.
Out of those 3,069 claims 1,576 of them were denied, Jiang was still able to obtain a jaw-dropping 1,493 replacement iPhones from Apple. If you do the math, each handset costs $600, and that comes out to $900,000 in losses to the company that Steve Jobs built.
Jiang is looking at up to 10 years in prison and a $2 million fine or twice the money he scored while carrying out the scheme depending on which is more significant. As part of his plea, he must also pay back Apple $200,000 in restitution for swindling the company. He is scheduled to be sentenced in late August, we bet he wished there was an app that could make this all go away right now.
Photo: Anton Novoderezhkin / Getty