Quan Jiang, a participant in a massive iPhone-trafficking scheme, was sentenced to just over three years in federal prison Monday afternoon.
Jiang had pled guilty last year to being part of an elaborate phone swapping scheme, which involved the former Oregon State University student receiving shipments of counterfeit iPhones from China. His role was to ask Apple to replace the non-functioning phones under their warranty policy and then send the real iPhones he received to China where they would be resold for a profit.
All told, Apple was swindled out of nearly $1 million in goods.
At Monday’s court appearance, U.S. District Judge Karin Immergut said while she believed Quan Jiang was remorseful for his actions, the fraud he committed was “ongoing and calculated,” constituting “a very serious offense.”
She agreed to go with the prosecutor’s recommendation of a 37-month prison sentence, in addition to three years of supervised release.
The prosecution said it’s likely Jiang will be deported after finishing his prison sentence as he no longer has legal status in the U.S.
Jiang’s attorney, Celia Howes, argued her client deserved probation, as he was hardly the orchestrator of the scheme, which entailed China-based manufacturing plants devoted to churning out fake iPhones.
His job in the scheme, she said, was discrete: “receive, send in, return.”
Through a mandarin-fluent translator, Jiang addressed the judge, telling her that he had changed since committing the fraud — a period of time where he was “naive, innocent and kind of stupid.”
Jiang said he was “terribly sorry” for the hurt he had caused family and friends, a handful of whom sat in the audience.
Assistant U.S. Attorney Ryan Bounds, who prosecuted the case, said he often sees versions of this scheme.
“The people who are coming up with these schemes and masterminding them are not necessarily in the United States, and are relying on students and young people who are looking to make some easy money to run the scheme for them,” he said.
This scheme specifically, Bounds said, is likely “being repeated around the county.” He noted a nearly identical case prosecuted in Utah in which the defendant submitted fake iPhones and received authentic replacements for resale in China.
These schemes, he said, could have serious consequences for the warranty policies of big companies like Apple.
The cost will be passed on to the consumer, he warned, if companies like Apple start having to “take our fingerprints and draw blood in order to confirm that the phone that we're submitting for a warranty claim is actually what we say it is.”
Jiang has already paid $200,000 to Apple in restitution.