Washington, D.C. - The U.S. Department of Justice announced Friday that five Chinese nationals are accused of orchestrating a massive scheme to return thousands of counterfeit iPhones, iPads, and other Apple products in exchange for genuine devices, resulting in at least $12.3 million in losses for the tech giant.

The defendants, identified as Yang Song, 40, of Corona; Junwei Jiang, 37, of East Los Angeles; Zhengxuan Hu, 26, of Alhambra; Yushan Lin, 30, of Corona; and Shuyi Xing, 34, of Corona, were arrested on Thursday. They face charges including conspiracy to commit wire and mail fraud, aggravated identity theft, wire and mail fraud, and conspiracy to traffic in counterfeit goods, according to an indictment returned on May 23 and unsealed Friday.

"The defendants are accused of taking advantage of Apple's customer-service policies to steal more than $12 million in merchandise," U.S. Attorney Martin Estrada for the Central District of California said in a statement. "Companies should not be victimized and defrauded for being responsive to customer needs, and these federal charges send a message that our office will take decisive action to uncover and prosecute those who perpetrate fraud."

Prosecutors allege that from December 2015 to March 2024, Song and Jiang coordinated with unidentified co-conspirators in China to ship counterfeit Apple iPhones, iPads, and other devices to the U.S. These counterfeit products were designed to mimic genuine Apple devices and included identification numbers matching those on real Apple products sold in North America, which were owned by real people and covered by Apple's manufacturer warranty and AppleCare+.

The defendants reportedly visited Apple stores throughout southern California to return the counterfeit devices, claiming they wouldn't turn on, were physically damaged, or had other defects. Apple employees then replaced the counterfeit devices with genuine Apple products, either during the in-store visit or later through the mail, according to prosecutors.

To avoid detection, the defendants rented dozens of mailboxes at UPS stores across southern California and used aliases to make appointments at Apple stores. Once they obtained the genuine devices, they shipped them to co-conspirators in the U.S. and abroad, primarily in China, where the devices were resold at a substantial profit.

In total, the defendants fraudulently returned over 16,000 counterfeit devices, resulting in at least $12.3 million in losses for Apple, according to the DOJ.

If convicted, the defendants face up to 20 years in prison for each of the conspiracy to commit wire and mail fraud, wire fraud, and mail fraud charges, two years mandatory minimum for the aggravated identity theft charge, and up to 10 years for the conspiracy to traffic in counterfeit goods charge.

Apple did not immediately respond to a request for comment. Counsel information for the defendants was not immediately available.

The federal government is represented by Andrew M. Roach of the U.S. Attorney's Office for the Central District of California.