Home > News > Foxconn Employees Defraud Apple NT$1.3B With Bootleg iPhones

Foxconn Employees Defraud Apple NT$1.3B With Bootleg iPhones

Key manufacturing partner Foxconn has been embroiled in an Apple-led investigation after defrauding the Cupertino tech giant of NTD 1.3 billion (USD 43M) over a three-year-long scam.

Though based in Taiwan, Foxconn’s Chinese facility at Zhengzhou had allegedly sold iPhones manufactuered from rejected parts to a Taiwanese mastermind.

According to a Taiwanese report, a whistleblower raised the alarm to Apple CEO Tim Cook, who seemingly directed the Business Assurance & Audit department to conduct an investigation.

With minimal internal manufacturing capacity, Apple’s wide-reaching supply chain network means that it is particularly vulnerable to fraud and other principal-agent problems.

Terry Gou, the former Foxconn chairman, said that “unreasonable things may happen to one or two workers”, given the company’s massive headcount – more than 1 million currently.

Earlier this year, Apple was scammed of nearly US$1M after a pair of Chinese engineering students used counterfeits to obtain replacements under warranty.

Another scam in June 2019 saw US$19M worth of iPhones stolen by a New York-based gang in a large-scale identity theft operation. The perpetrators billed instalment plans to unsuspecting victims, and made off with the brand-new devices before they were caught after seven years of operation.

Ian Ling
Ian is the resident Tech Monkey and Head of Content at VR Zone. His training in Economics and Political Science is at the basis of his love for journalism and storytelling. A photographer by passion, and an audiophile by obsession, Ian is captivated by all forms of tech that makes enthusiasts tick.

One thought on “Foxconn Employees Defraud Apple NT$1.3B With Bootleg iPhones

  1. Brian

    Well that’s just a fraction of what the fruit company by ways of creative bookkeeping omit to pay in tax.
    The bigger they are the more creative and greedy they become, so no respect from here.

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