Two Chinese nationals living in Riverside County, California, Yushan Lin, 31, and Shuyi Xing, 35, have admitted guilt in a huge fraud operation that tricked Apple out of millions of dollars. The elaborate scam ran for years and involved thousands of counterfeit iPhones, iPads, and other products. Federal prosecutors said the scheme caused Apple losses of more than $16.2 million.
Lin pleaded guilty to conspiracy to commit wire fraud and mail fraud, while Xing pleaded guilty to the same charges as well as conspiracy to commit money laundering in a separate scheme involving over $1 million from elder fraud cases. With their pleas, all six people connected to the fraud have now confessed to federal charges.
Other defendants who earlier admitted guilt include Wenhui Huang, 40, described as the ringleader, Yang Song, 38, the second-in-command, Junwei Jiang, 38, and Zhengxuan Hu, 27.
Authorities described this as one of the most damaging fraud operations against Apple in Southern California. The fake returns involved tens of thousands of counterfeit Apple devices that were made to look like real ones, complete with copied identification numbers from actual Apple products.
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How the Fraud Worked
The fraud began as early as 2015 and stretched until March 2024. Counterfeit devices were smuggled from China to California. These fake iPhones and iPads were designed to closely resemble real Apple products and even carried serial numbers and identification numbers of genuine devices sold in the United States.
Using these copied numbers, the counterfeit products were disguised as if they were under Apple’s warranty or extended AppleCare+ program. This allowed the fraudsters to claim free replacements or repairs. They would then walk into Apple stores across Southern California, presenting the fake devices as if they were real but broken.
The scammers told store employees the devices would not power on, were physically damaged, or had other problems. Apple employees, believing the devices were authentic, would replace them with brand-new genuine products or send them off for repairs. The fraudsters then collected the genuine replacements at the store or had them delivered to mailboxes rented across the region.
Investigators revealed that the group, including Huang, Song, Jiang, Hu, Lin, and Xing, visited numerous Apple stores in major shopping centers, including locations in Los Angeles, Orange County, and other parts of Southern California. In some cases, members of the group would return fake devices at as many as ten different Apple stores.
Once they obtained the real devices, the group shipped them to partners in the United States and China. Those genuine products were then sold for large profits.
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Scale of the Losses and Sentencing
The scope of the scam was massive. According to federal prosecutors, the group attempted to return more than 27,645 counterfeit Apple devices. Out of those, the company suffered actual losses of over $16.2 million.
Lin and Xing alone were responsible for attempting to return 1,584 counterfeit products, which caused Apple over $1.1 million in damages.
Authorities emphasized that the fraud did not only hurt the company but also affected real Apple customers whose serial numbers and product identification codes were stolen. Their legitimate devices were unknowingly linked to the counterfeit returns, creating further confusion and harm.
Federal investigators, including Homeland Security Investigations and the IRS Criminal Investigation division, worked together on the case. The U.S. Postal Inspection Service and the Los Angeles Police Department also provided support.
Sentencing hearings are scheduled for December. Lin faces up to 20 years in prison, while Xing could receive as many as 40 years for the combined fraud and money laundering charges. Huang, Song, Jiang, and Hu also await sentencing.
This case highlights how organized fraud rings can exploit warranty systems of large companies by using counterfeit technology and stolen identification numbers. For Apple, the impact of this scam stretched far beyond just financial losses, with thousands of genuine customers unknowingly caught up in the scheme.
