Over the span of two years, a Chinese national in Oregon sent devices that looked like iPhones to Apple, saying they wouldn't turn on and should be replaced under warranty. He didn't just submit a couple of the devices -- he delivered in person or shipped to Apple around 3,000 of them.
Apple responded by sending almost 1,500 replacement iPhones, each with an approximate resale value of $600.
But the devices that Quan Jiang sent Apple were fake.
Jiang, 30, a former engineering student at a community college in Albany, Oregon, pleaded guilty in federal court Wednesday to trafficking in counterfeit goods, the U.S. Attorney's office in Portland announced.
The presence of fake iPhones and other high-tech gadgets has become an issue in global resale markets, with some counterfeit versions operating so well it's hard for users to tell the difference between them and the genuine products. But in the Oregon case, the makers of the thousands of fake phones apparently didn't even have to bother with having working operating systems.
An Apple official quoted by a Homeland Security Investigations Special Agent Thomas Duffy in a court document exposed a vulnerability that Jiang exploited.
"Submission of an iPhone that will not power on is critical to perpetuating iPhone warranty fraud, as the phone will not be able to be immediately examined or repaired by Apple technicians, triggering the Apple iPhone replacement process as part of its product warranty policy," Duffy wrote, quoting Apple brand protection representative Adrian Punderson.
The U.S. Attorney's office in Portland said Jiang would import the counterfeit devices from Hong Kong and submit them to Apple using various assumed names. The genuine replacement phones Jiang received would be sold in China. Jiang's associate would pay Jiang's mother, who lives in China, who would then deposit the money into Jiang's bank account.
Jiang received packages containing between 20 and 30 counterfeit iPhones from associates in Hong Kong between Jan. 1, 2016, and Feb. 1, 2018, according to court documents.
Apple realized something was amiss as early as June 30, 2017, when its legal counsel sent Jiang a "cease and desist" letter to an address in Corvallis where 150 warranty claims emanated. The lawyers said the company knew he was importing counterfeit Apple products, according to Duffy's affidavit. Jiang didn't respond, so the Apple lawyers sent a second letter.
Apple did not immediately respond to requests for comment on the case.
Apple rejected 1,576 warranty claims associated with Jiang, Duffy said. The 1,493 claims that resulted in replacement iPhones being delivered by Apple represented an $895,000 loss to the Cupertino, California-based company, Duffy wrote.
Brad Bench, who heads the Homeland Security Investigations office in Seattle, said in a statement that trafficking in counterfeit goods hurts the economy, legitimate businesses, and impact consumers directly.
Jiang faces a maximum sentence of 10 years in prison, a $2 million fine or twice his proceeds, whichever is greater, when he is sentenced on Aug. 28. Under a plea agreement, the U.S. Attorney's office will recommend a prison sentence of three years, at least $200,000 in restitution to Apple.
And Jiang must forfeit his black 2015 Mercedes-Benz CLA 250 coupe.
Follow Andrew Selsky on Twitter at https://twitter.com/andrewselsky
KYIV, Ukraine (AP) — A big, new package of U.S. military aid will help Ukraine avoid defeat in its war with Russia. Winning will still be a long slog.
The arms and ammunition in the $61 billion military aid package should enable Ukraine to slow the Russian army's bloody advances and block its strikes on troops and civilians. And it will buy Ukraine time — for long-term planning about how to take back the fifth of the country now under Russian control.
“Ultimately it offers Ukraine the prospect of staying in the war this year,” said Michael Clarke, visiting professor in war studies at King’s College London. “Sometimes in warfare you’ve just got to stay in it. You’ve just got to avoid being rolled over.”
The U.S. House of Representatives approved the package on Saturday after months of delays by some Republicans wary of U.S. involvement overseas. It was passed by the Senate on Tuesday, and President Joe Biden said he would sign it Wednesday.
The difference could be felt within days on the front line in eastern and southern Ukraine, where Russia’s much larger army has been slowly taking territory against massively outgunned Ukrainian forces.
The aid approval means Ukraine may be able to release artillery ammunition from dwindling stocks that it has been rationing. More equipment will come soon from American stocks in Poland and Germany, and later from the U.S.
The first shipments are expected to arrive by the beginning of next week, said Davyd Arakhamia, a lawmaker with Ukrainian President Volodymyr Zelenskyy’s Servant of the People party.
But opposition lawmaker Vadym Ivchenko, a member of the Ukrainian parliament’s National Security, Defense and Intelligence Committee, said logistical challenges and bureaucracy could delay shipments to Ukraine by two to three months, and it would be even longer before they reach the front line.
While details of the shipments are classified, Ukraine’s most urgent needs are artillery shells to stop Russian troops from advancing, and anti-aircraft missiles to protect people and infrastructure from missiles, drones and bombs.
What’s coming first is not always what front-line commanders need most, said Arakhamia, the Ukrainian lawmaker. He said that even a military giant like the U.S. does not have stockpiles of everything.
“The logic behind this first package was, you (the U.S.) finds our top priorities and then you see what you have in the warehouses,” Arakhamia said. “And sometimes they do not match.”
Hope for future breakthroughs for Ukraine still hangs on more timely deliveries of Western aid, lawmakers acknowledge.
Many experts believe that both Ukraine and Russia are exhausted by two years of war and won’t be able to mount a major offensive — one capable of making big strategic gains — until next year.
Still, Russia is pushing forward at several points along the 1,000-kilometer (600-mile) front, using tanks, wave after wave of infantry troops and satellite-guided gliding bombs to pummel Ukrainian forces. Russia is also hitting power plants and pounding Ukraine’s second-largest city, Kharkiv, which is only about 30 kilometers (some 20 miles) from the Russian border.
Ivchenko said the goal for Ukraine’s forces now is to “hold the line” until the bulk of new supplies arrive by mid-summer. Then, they can focus on trying to recapture territory recently lost in the Donetsk region.
“And probably ... at the end of summer we’ll see some movement, offensive movement of the Ukrainian armed forces,” he said.
Some military experts doubt Ukraine has the resources to mount even small offensives very soon.
The U.S. funding “can probably only help stabilize the Ukrainian position for this year and begin preparations for operations in 2025,” said Matthew Savill, director of military sciences at the Royal United Services Institute, a think tank.
In the best-case scenario for Ukraine, the American aid will give commanders time to reorganize and train its army — applying lessons learned from its failed summer 2023 offensive. It may also galvanize Ukraine’s allies in Europe to increase aid.
“So this just wasn’t about Ukraine and the United States, this really affected our entire 51-country coalition,” said U.S. Congressman Bill Keating, a Democrat who visited Kyiv on Monday as part of a four-member congressional delegation.
Zelenskyy insists Ukraine's war aim is to recapture all its territory from Russia — including Crimea, seized illegally in 2014. Even if the war ultimately ends through negotiation, as many experts believe, Ukraine wants to do that from as strong a position as possible.
Whatever happens on the battlefield, Ukraine still faces variables beyond its control.
Former U.S. President Donald Trump, who seeks to retake the White House in the November election, has said he would end the war within days of taking office. And the 27-nation Europe Union includes leaders like Hungarian President Viktor Orbán and Slovakian Prime Minister Richard Fico, who have opposed arming Ukraine.
Ukraine’s allies have held back from supplying some arms out of concern about escalation or depleting their own stocks. Ukraine says that to win the war it needs longer-range missiles it could use for potentially game-changing operations such as cutting off occupied Crimea, where's Russia's Black Sea fleet is based.
It wants Army Tactical Missile Systems, known as ATACMs, from the U.S. and Taurus cruise missiles from Germany. Both governments have resisted calls to send them because they are capable of striking targets deep within Russian territory.
The new bill authorizes the president to send Ukraine ATACMS “as soon as practicable.” It's unclear what that will mean in practice.
Sometimes, promised weapons have arrived late, or not at all. Zelenskyy recently pointed out that Ukraine is still waiting for the F-16 fighter jets it was promised a year ago.
Meanwhile, Russia is using its advantage in troops and weapons to push back Ukrainian forces, perhaps seeking to make maximum gains before Ukraine's new supplies arrive.
For weeks it has pummeled the small eastern city of Chasiv Yar, at the cost of 900 soldiers killed and wounded a day, according to the U.K. Ministry of Defense.
Capturing the strategically important hill town would allow them to move toward Sloviansk and Kramatorsk, key cities Ukraine controls in the eastern region of Donetsk. It would be a significant win for Russian President Vladimir Putin, who Western officials say is bent on toppling Ukraine’s pro-Western government.
Russian pressure was aimed not just at gaining territory, but on undermining Zelenskyy and bolstering critics who say his war plan is failing, said Clarke of King's College London.
The U.S. aid package decreases the likelihood of a political crisis in Ukraine, and U.S. Speaker Mike Johnson deserves credit for pushing it through Congress, he said.
"He held history in his hands,” Clarke said.
Follow AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine
From left, U.S. representatives Nathaniel Moran, R-Tx, Tom Kean Jr, R-NJ, Bill Keating, D-Mass, and Madeleine Deane, D-Pa, talk to journalists during a joint news conference outside Saint Michael cathedral in Kyiv, Ukraine, Monday, April 22, 2024. A newly approved package of $61 billion in U.S. aid may prevent Ukraine from losing its war against Russia. But winning it will be a long slog. (AP Photo/Francisco Seco)
A volunteer makes a camouflage net at a facility producing material for Ukrainian soldiers in Kyiv, Ukraine, Monday, April 22, 2024. A newly approved package of $61 billion in U.S. aid may prevent Ukraine from losing its war against Russia. But winning it will be a long slog. (AP Photo/Francisco Seco)
Davyd Arakhamia, a lawmaker with Ukrainian President Volodymyr Zelenskyy's Servant of the People party, talks during an interview with Associated Press in Kyiv, Ukraine, Monday, April 22, 2024. (AP Photo/Francisco Seco)
A woman rallies to raise awareness on the fate of Ukrainian prisoners of war in Kyiv, Ukraine, Sunday, April 21, 2024. (AP Photo/Francisco Seco)
Ribbons with the colors of the European Union and Ukraine are attached to a tree next to memorial wall of Ukrainian soldiers killed during the war in Kyiv, Ukraine, Monday, April 22, 2024. (AP Photo/Francisco Seco)
The body of a woman killed by Russian bombardment in Chernihiv, Ukraine, Wednesday, April 17, 2024. (AP Photo/Francisco Seco)
Soldiers carry the coffins of two Ukrainian army sergeants during their funeral in Lviv, Ukraine, Tuesday, April 16, 2024. (AP Photo/Francisco Seco)
