How a Fraud Ring Stole Over $19 Million Worth of iPhones in 7 Years

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An organized fraud ring allegedly stole more than $19 million worth of iPhones over a seven year period before getting caught, Quartz reported.

All in all, six people were charged in the case, according to a recently unsealed complaint filed in April by federal prosecutors in New York. According to Quartz, at the core of the scheme was a sophisticated and large-scale identity theft operation.

While the operation was highly organized, the scammers used a fairly simple method to procure the iPhones. Using fake IDs and debit cards to pose as existing wireless customers, the scammers would go to carrier stores across the U.S. and request an upgrade to a new iPhone on a monthly installment plan.

The cellular customers whose identities were stolen would then end up being charged for the phone upgrades on their monthly bills. Because installment plans take some time to kick in, the fraud usually went undetected by the customer until the first charge.

After that, the defrauded iPhones would be sent back to the crime ring’s New York headquarters — where the fraudsters would then sell the devices on the black market.

It isn’t clear how many unsuspecting wireless customers were impacted or how many devices in total were stolen. The fraudsters traveled to 34 states to carry out the scheme.

The crime ring got away with the scam for several years, until an unnamed person working at an overnight shipping company became suspicious of all the packages sent out of state that lacked physical home or business addresses.

When the shipping employee opened some of these packages, they discovered around 250 iPhones inside of them — as well as fake credit cards, driver’s licenses and passport cards.

The defendants are being charged with felony counts of mail fraud, conspiracy. And aggravated identity theft, Quartz reported. The defendants have pleaded not guilty and each has been released on $100,000 bail.

Apple’s devices are a frequent target for criminals, whether they’re burglars or fraudsters. Presumably, that’s because iPhones and other Apple devices are fairly expensive and retain their value for quite some time.

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