This article was produced in collaboration with Court Watch, an independent outlet that unearths overlooked court records. To subscribe to Court Watch, click here.
The Department of Homeland Security says it has cracked a large-scale, multi-state fraud ring that was allegedly buying Apple products from Target stores all over the United States, replacing them with counterfeit devices, then returning them.
DHS arrested a man named Chalvin Tan and said that he and other unnamed coconspirators “have been identified in a fraud involving the theft of genuine electronic products and the replacement of those genuine products with counterfeit products in a large-scale retail theft scheme being conducted throughout the United States,” an affidavit filed in Alabama reads.
Notably, DHS said that the counterfeit items being returned to stores have been “placed into a mold (Jig) where the laser engravers alter the counterfeit products to appear to have the same markings as the genuine products,” the affidavit says. “After the alteration process is complete, the altered products are returned to the store and money is returned.”
Tan was pulled over earlier this month for distracted driving in Baldwin County, Alabama. Police say that they found 180 Apple devices in his car which they believed to be counterfeit, as well as engraving machines and jigs to hold the devices, as well as genuine Apple devices that had been packaged to be shipped and resold elsewhere.
Tan waived his Miranda Rights and spoke to authorities. According to the affidavit, he told them that the scheme involved mailing the stolen products to Hong Kong or selling them to a person in California over WeChat. He also said that the counterfeit products came from Los Angeles. The affidavit does not contain more info on what the counterfeit devices actually are or how they are made.
Last year, 404 Media reported on the rise of “refund fraud,” and the increasingly sophisticated ways that criminals buy items then return a fake item or no item at all.
