Scammer Group Defrauds Apple, Steals iPhones Worth Over $19 Million Using Fake IDs & Cards

Pappi Hex

A New York City-based gang of fraudsters have stolen iPhones worth more than $19 million over the course of 7 years from Apple, using fake IDs and counterfeit cards, QZ reports.

The gang, dubbed as the 'Fraud Ring' by the FBI and NYPD, is said to have been run by 6 persons that that were known as the 'Top Dogs'. The gang are said to defraud Apple by using fake IDs and counterfeit debit cards to get new device at little or no cost.

The ring is said to use installment as payment method to allow them carry out the scam without raising smoke. When the Apple products arrives, they will then sale the products on the black market at a hefty amount of money.

QZ explained that victims involved in the scam included customers whose accounts were compromised and carriers as well.

According to court fillings, the crew's operation was relatively simple, "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 then come as a surprise on the actual customer's next bill. By then, the scammers-and the devices-were already long gone."

An unnamed co-operating witness (identified as CW-1) exposed the working of the group in exchange for a reduced sentence.

CW-1 who joined the group in 2013 said that the top leaders of the ring were called 'Top Dogs', and they also made most of the money. The middlemen carried out all the illegal activities like stealing people's identity through various phishing scams. While at the bottom were the drivers and runners that made trips to different locations to carry out the procurements, and then ship the phone units back to the Bronx.

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CW-1 said that he made roughly 18 trips, of which he was being paid $100 for each phone that procured.

"On each trip, CW-1 would be accompanied by a driver," the complaint read. "In advance of the trip, CW-1 would receive a fake ID and bank card. The bank card was to be used as a secondary form of identification in case CW-1 was questioned as to his identity...Every few days on these trips CW-1 would send back to the New York area, via overnight delivery, the iPhones he had acquired on the trip and since the last shipment."

However, in December 2014, a shipping company that was used for the overnight shipping of these Apple products became suspicious of all the large packages that were being sent to the same address....which weren't anybody's address at all.

An employee decided to open 39 of the packages and found roughly 250 phones inside along with dozens of fraudulent credit cards, driver's licenses, and passports.

The defendants were charged with felony counts of mail fraud, conspiracy, and aggravated identity theft. 

QZ says the defendants pleaded not guilty and been released after paying a $100,000 bail bond.

Incidents like this involving Apple have happened in the past. However, this looks like the biggest theft yet in terms of the value of the devices stolen.

Not too long, we made a report in which a group of people were accused of stealing more than 1,300 iPhones worth over $1 million from Apple. The scam began when a Chinese engineering student began to smuggle fake iPhones from China to the US.

The Chinese student, Quan Jiang, would send copies of the fake device to Apple to be repaired or replaced, claiming that the devices weren't booting. Since the device were fake didn't have any working OS, Apple will then replace them because they wouldn't boot, and thus, will need sometime before they find the real issue with the (fake) gadgets.

When Quan Jiang receives the iPhone replacements, he then forwards them to his ring in China who in turn sell the Apple products expensive.

Apple replaced many of the fake devices until it became suspicious of the whole thing. Quan jiang was later arrested and charged to court where he admitted.

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