Apple’s Genius Bar often makes it very simple to repair a broken iPhone under your AppleCare plan, but a pair of (criminally) industrious siblings discovered a method to game the system by exchanging fake handsets for genuine ones. Sadly, they were discovered in 2019 while attempting to trade 10,000 bogus Apple devices over the period of eight years, and this week, according to the Times of San Diego, they were sentenced to federal jail.
Zhimin and Zhiting Liao, who live in San Diego and go by the names Jimmy and Allen Liao, made over $6.1 million from selling genuine Apple devices, including as iPhones and iPads, to customers overseas. The brothers were given federal prison terms of 41 months. As part of the plea agreement, the brothers will serve more than three years in prison and forfeit 200 iPhones, as well as five San Diego homes in which they had an interest and $250,000.
The wives of the brothers also admitted to their involvement and received three years of probation. Zhiwei Liao, a third brother, will be sentenced later this month. Eight further conspirators also entered guilty pleas.
The Liaos aren’t the only people to run a fake-for-real exchange operation; an Oregon college student was found guilty of defrauding Apple Stores in 2019. The student would enter Apple Stores with counterfeit, defective iPhones that were stamped with under-warranty serial numbers. He would receive brand-new replacements that he would send back to China in exchange for money when the Genius Bar couldn’t rule out the phones as possibly being authentic. Given that Apple is serializing more internal components than ever before, this specific trick might be more difficult to pull off presently.
However, the Liao’s plan was considerably more elaborate. Prosecutors reportedly said that Zhimin Liao personally visited 105 Apple Stores in 22 states in an effort to trade around 720 fake iPhones and iPads, according to the Times of San Diego. Approximately 718 device exchange attempts were made throughout Zhiting Liao’s quest in at least 200 Apple Stores spread across 18 US states and Canada.
