Riverside County, CA – Two Chinese nationals living in Riverside County pleaded guilty on Wednesday to participating in a scheme that defrauded Apple of more than $16.2 million by fraudulently returning thousands of counterfeit iPhones, iPads, and other devices, according to federal prosecutors.
Yushan Lin, 31, and Shuyi Xing, 35, both of Corona, admitted to conspiracy charges involving wire and mail fraud. In addition, Xing pleaded guilty to a separate charge of conspiracy to commit money laundering, connected to more than $1 million in elder fraud schemes, officials said.
Additional Defendants and Ringleader Identified
Prosecutors confirmed that four other defendants have also pleaded guilty in the case:
- Wenhui Huang, 40, of Chino Hills, identified as the ringleader, who authorities say was in the country illegally.
- Yang Song, 38, of Corona, described as the group’s second-in-command.
- Junwei Jiang, 38, of East Los Angeles.
- Zhengxuan Hu, 27, of Alhambra, who was also allegedly in the country illegally.
The conspiracy spanned from at least December 2015 to March 2024, making it nearly a decade-long operation.
How the Scheme Worked
Authorities say the counterfeit Apple devices were smuggled from China into California. The fake devices were designed to look nearly identical to genuine Apple products, even featuring serial numbers that matched real devices still under warranty.
As per reports, the group would bring the counterfeit items to Apple stores across Southern California, including locations in Beverly Hills, Sherman Oaks, Pasadena, Irvine, Northridge, Manhattan Beach, Brea, Rancho Cucamonga, and Cerritos, as well as major malls such as The Grove, South Coast Plaza, Fashion Island, and The Americana at Brand.
By falsely claiming the products were defective, the conspirators convinced Apple employees to exchange the fakes for genuine devices under warranty. The authentic iPhones and iPads were then shipped back to China and other countries for resale at a profit.
Millions in Losses to Apple
Federal prosecutors revealed that Lin and Xing personally attempted to return at least 1,584 counterfeit devices, causing over $1.1 million in losses. The broader conspiracy attempted to return 27,645 counterfeit devices, leading to a staggering $16,239,254 in actual losses for Apple.
Sentencing Scheduled
U.S. District Judge André Birotte Jr. has scheduled sentencing for December 10. Lin faces up to 20 years in federal prison, while Xing could face a maximum of 40 years due to the money laundering charge.
Broader Implications for Tech Companies
Experts note that cases like this highlight the challenges global tech companies face in protecting their supply chains, warranties, and customer trust from increasingly sophisticated counterfeit schemes. Authorities emphasize that such fraud not only impacts corporations financially but also creates risks for consumers who unknowingly purchase counterfeit products.
Community Awareness
Law enforcement agencies are encouraging the public to be cautious when buying electronics from non-official sources or resellers, especially when deals seem “too good to be true.” Counterfeit goods can present safety risks and often support larger criminal networks.
What do you think about this case? Should tech companies tighten their warranty systems, or should more responsibility fall on consumers to identify counterfeit goods? Share your views in the comments below.
