Pasadena Apple Store Among Locations Targeted in $12.3 Million Fraud Scheme

Five Chinese nationals were scheduled to be arraigned Friday in Los Angeles on charges of operating a counterfeit Apple device scheme that targeted stores throughout Southern California, including Apple’s Old Pasadena store at 54 West Colorado Blvd. The defendants allegedly returned thousands of bogus iPhones, iPads, and other products, causing Apple losses of at least $12.3 million, prosecutors said.

According to the indictment, from roughly December 2015 until March 2023, alleged ringleader Yang Song, 40, of Corona, and Junwei Jiang, 37, of East Los Angeles, coordinated with associates in China to ship counterfeit Apple devices to them and other U.S.-based co-conspirators. The counterfeit products were designed to resemble genuine Apple devices, including matching identification numbers of items still under warranty in North America.

The defendants allegedly posed as the lawful owners of the genuine products when returning the counterfeit devices at Apple stores across Southern California. Locations included Pasadena, Beverly Hills, Sherman Oaks, Irvine, Northridge, Manhattan Beach, Brea, Rancho Cucamonga, Cerritos, and shopping malls such as The Grove in Los Angeles, South Coast Plaza in Costa Mesa, Fashion Island in Newport Beach, and The Americana at Brand in Glendale.

Song, Jiang, Zhengxuan Hu, 26, of Alhambra, Yushan Lin, 30, and Shuyi Xing, 34, both of Corona, would sometimes visit up to 10 different Apple stores in a single day to return counterfeit devices, court papers allege. The defendants claimed the devices were genuine but broken and covered by Apple’s warranty programs.

Apple employees would either replace or repair the counterfeit devices with genuine products during the same visit or ship them to a repair center, eventually providing the defendants with authentic devices. The defendants then allegedly shipped the genuine products to associates in the United States and abroad, primarily in China, where they were sold at a substantial profit.

Prosecutors said the defendants fraudulently returned or attempted to return more than 16,000 counterfeit Apple devices, causing Apple at least $12.3 million in losses.

All of the defendants are charged with one count of conspiracy to commit wire fraud and mail fraud, one count of aggravated identity theft, seven counts of wire fraud, 12 counts of mail fraud, and one count of conspiracy to traffic in counterfeit goods.

If convicted, they would each face up to 20 years in prison on each of the conspiracy to commit mail and wire fraud, wire fraud, and mail fraud charges; a mandatory minimum of two years imprisonment for the aggravated identity theft charge; and a maximum sentence of 10 years imprisonment on the conspiracy to traffic counterfeit goods charge, according to the United States Attorney’s Office.

“The defendants are accused of taking advantage of Apple’s customer-service policies to steal more than $12 million in merchandise,” U.S. Attorney Martin Estrada said. “Companies should not be victimized and defrauded for being responsive to customer needs, and these federal charges send a message that our office will take decisive action to uncover and prosecute those who perpetrate fraud.”