The source of profits was well-functioning iPhone main board and display parts, since they could easily be smuggled abroad, usually into the Chinese market. The refurbished iPhones were also sold illegally. (image credit: Kobiz Media/Korea Bizwire)
SEOUL, April 19 (Korea Bizwire) – A team of enterprising individuals has proven that you can make money cashing in on Apple’s refurbished iPhone service, as long as you have the right partners.
The members of a small crime ring were arrested yesterday on charges of fraud and misappropriation after they abused Apple’s warranty service to offer refurbished phones, said the Namdaemun Police Station in Seoul.
A total of 16 people, each with distinct roles, conspired together in this phony deal. The plot involved the coordination of different members of the team, with roles identified as A, B, and C.
Individual A first bought working used iPhones and inserted some fake parts into the phones – usually the main board and display parts – turning the devices into “malfunctioning” iPhones.
These ‘transformed’ iPhones, in turn, fulfilled the requirements for iPhone users’ ‘problem reporting’, and were eligible to be exchanged for refurbished iPhones under Apple’s warranty program.
At this stage, officials at an iPhone warranty service or A/S center had to cooperate to carry the plan out, so role B proved to be none other than officials at A/S enterprises.
The accused B parties judged that the phony phones had serious problems, and helped the A individuals to exchange the faulty devices for Apple’s officially refurbished phones.
Meanwhile, C also joined forces with the others, providing false iPhone parts to the network.
The source of profits was well-functioning iPhone main board and display parts, since they could easily be smuggled abroad, usually into the Chinese market. The refurbished iPhones were also sold illegally.
The total profits amounted to six billion won, according to the police report.
“The accused parties spotted loopholes in Apple’s phone switch warranty service, which is different from the repair services common at Korean phone makers. Apple’s after sales services should be updated to prevent a recurrence of this type of scam in the future,” law enforcement officials said.
By Kevin Lee (kevinlee@koreabizwire.com)
