Chinese man guilty of defrauding Apple out of 1,500 iPhones

SALEM, Ore. -- A Chinese national in Oregon sent hundreds of supposedly broken iPhones to Apple over two years, and got replacements under warranty of almost 1,500 devices.

The other big problem, federal prosecutors say, is that the iPhones he sent were fake. He now faces three years in prison and a fine under a plea agreement after pleading guilty to trafficking in counterfeit goods.

Quan Jiang, 30, a former engineering student at a community college in Albany, Oregon, pleaded guilty on Wednesday. The U.S. Attorney's office in Portland said Jiang would import the counterfeit devices from Hong Kong and submit them to Apple in exchange for genuine warranty replacement phones to be sold on the Chinese market.

Jiang imported more than 2,000 inoperable counterfeit iPhones. He obtained approximately 1,500 genuine replacement iPhones, each with an approximate resale value of $600.