A trio of Chinese national con artists pleaded guilty to running an elaborate conspiracy that involved scamming money from elderly and lonely Americans to buy Apple products to sell in East Asia, Department of Justice officials announced.
The three – Naxin Wu, 26; Mengying Jiang, 34; and Mingdong Chen, 28 – used stolen gift cards to buy expensive electronics they stockpiled in a New Hampshire warehouse and shipped to China and Hong Kong, according to court documents. They also returned counterfeit Apple products for gift cards to buy more electronics, the guilty plea says.
Wu, Jiang and Chen ran the scheme throughout 2023, court documents say. Law enforcement officials say their cell is one of many operating around the country. The groups tend to work from states such as New Hampshire that have no sales tax, according to the U.S. Attorney’s Office.
The trio plead guilty in the Granite State to conspiracy to commit wire fraud, according to the New Hampshire U.S. Attorney’s Office. Sentencing is scheduled for April.
Scams like the one the three Chinese nationals admitted to operating show how the hundreds of millions con artists bilk from Americans wind up getting used in other crime schemes.
Others have used the counterfeits from East Asia to take advantage of Apple by sending in counterfeit phones that couldn’t be repaired in order to induce the company to replace the counterfeits with genuine iPhones,
Apple isn’t the only one plagued by fraudsters. The National Retail Foundation said in a study “return fraud” cost companies $101 billion in 2023. For every $100 in returned products, retailers lose on average $13.70 from fraud, the foundation said in December.
Jiang’s attorney Olivier D. Sakellarios offered a vigorous apology for his client when reached on the phone by USA TODAY.
“This scam comes from way higher than my client,” he said. “My client isn’t getting rich off of any of this but nonetheless he realized he was doing something wrong and wanted to take accountability for it.”
Attorneys for the other two defendants did not immediately respond to requests for comment.
The U.S. Attorney’s for the District of New Hampshire received a request for comment but did not answer.
Romance fraud, stolen money auctions and counterfeit phones
The New Hampshire cell that Wu, Jiang and Chen belonged to is one of just several such groups running similar scams around the country, according to the Justice Department. Officials say other unknown people belonged to the New Hampshire cell.
Cells fund organized crime operations in China, using stolen gift cards they buy at auctions, court documents say. The gift cards come from other scams, including romance fraud, where someone sends money to a person believed to be a romantic partner but is actually a con artist. The auctions happen daily on WeChat, a Chinese social media and mobile payments app.
Wu, Jiang and Chen’s operation was uncovered in an investigation into $100 million stolen through romance fraud, elder fraud and cyber intrusions into U.S. companies, court filings say.
Victims of the fraud included an elderly Spokane, Washington, resident who was tricked into buying $4,000 worth of the gift cards. Another lived in Alabama. The cards were stolen and auctioned off throughout October and December of 2023.
The trio in New Hampshire held the electronics they bought at a warehouse in Salem, according to the guilty plea agreement. Law enforcement found $8 million worth of Apple products, many gift cards and $10,000 in cash in searching the warehouse, court documents say. An additional $20,000 worth of electronics was found in a car belonging to one of the three, according to the guilty plea.
Investigators also found 2,000 counterfeit Apple products at the warehouse, court documents say. Scammers have counterfeit products imported from China and return them to stores for additional gift cards, the guilty plea says.
The New Hampshire used crypto currency to buy the gift cards and sell the Apple products they stockpiled, court documents say.
‘This scam comes from way higher than my client’
Jiang’s attorney Sakellarios acknowledged his client was a small part in a much larger fraud scheme.
“Whoever is in charge of running these scams is exploiting poor and uneducated people,” said Sakellarios, referring to Jiang and others taken in overseas criminal gangs running operations.
Cells operating similar schemes in the U.S. have purchased some 50,000 Apple products worth a total of $45 million, according to the guilty plea agreement. The products are then predominantly shipped to China, Russia and Vietnam. The cells tend to operate in states with no income tax.
