It’s being reported that a gang of fraudsters managed to steal $19 million (roughly Rs. XXX crores) worth of iPhone units over the past seven years in the US. The gang was dubbed as the ‘Fraud Ring’ by the FBI and NYPD, and it was run by six people that were known as ‘Top Dogs’. This gang used fake IDs and counterfeit debit cards to buy new iPhone devices and then sold them at a hefty price in the black market. They reportedly used the instalment method as payment, allowing them to carry out the scam seamlessly.
Quartz has published all the details of the case, and the victims include customers whose accounts were compromised and carriers as well. According the court filing, “Associates using fake IDs and counterfeit debit cards went to mobile phone stores and posed as the legitimate account holders, looking to upgrade to new phones on their existing accounts. They would spread payments out over many months, which would come as a surprise on the actual customer’s next bill. By then, the scammers—and the devices—were already long gone.”
The defendants, the report states, are charged with felony counts of mail fraud, conspiracy, and aggravated identity theft. The theft was carried out in 34 US states, and the number of customers that have been affected have not been disclosed. A co-operating witness (identified as CW-1) exposed the working of the group in exchange for a reduced sentence. The top leaders are called ‘Top Dogs’, and they made the most amount of money, the middlemen carried out all the illegal activity like stealing identities via various phishing scams. At the bottom level are drivers and runners that made trips to different locations to carry out the fraud, and ship the units back to the Bronx.
CW-1 joined the ring in 2013 and has made roughly 18 trips. The ring paid him $100 for each iPhone he was able to steal. In 2014, a shipping company became suspicious of big packages being sent to the same address – never a person’s address. An employee decided to then open few of these packages, and found roughly 250 phones along with fraud cards, driver’s licenses, and passports.
The report states that the defendants have pleaded not guilty and are out on bail after paying a $100,000 bond.
Of course, this isn’t the first time an iPhone scam has been conducted, but it may be the largest yet theft in terms of value the devices stolen. A very similar scam was busted last year where a group was accused of stealing more than 1,300 iPhones worth more than $1 million. Separately, two Chinese students in the US state of Oregon allegedly duped Apple out of nearly $1 million in iPhone replacements. The scam began in 2017 when engineering students Yangyang Zhou and Quan Jiang started smuggling fake copies of iPhones from China to the US. Later they would send the iPhones for repair or replacement, claiming that their (fake) devices were not switching on. In many cases, Apple replaced the fake goods with real iPhone units, which cost the company an estimated $895,800, the report said.