Apple Investigating Massive Fraud by Foxconn Selling iPhones Made From Rejected Parts

Dec 18, 2019
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Foxconn is one of the major manufacturers of the iPhone. The company is conducting an internal investigation into allegations of fraud. The company is allegedly being accused of selling iPhones made from rejected parts. In addition, it is said to have accumulated an astounding NT$1.3B which translates into $43M over a period of three years. Let's dive in to see some more details on the Foxconn fraud.

$43M Foxconn Fraud Being Investigated - iPhones Made From Rejected Parts and Sold as Genuine

It is alleged that the company used defective parts in the iPhone and sold them as genuine devices manufactured in Chinese plants. The defective parts were potentially used to cheat people while they should have been destroyed. It's a surprise that the fraud went unnoticed for a long time. Taiwan News reported on Foxconn fraud:

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Taiwanese electronics manufacturer Foxconn said on Wednesday (Dec. 18) that an investigation has been launched into an alleged fraud in which employees sold iPhones with defective components.

A Taiwanese businessman has purportedly worked with a group of management staff at Foxconn’s Zhengzhou facility to obtain and assemble flawed iPhone parts, which are then sold under the guise of iPhone products manufactured at the Chinese production base.

The defective components would have been destroyed according to normal procedures. The businessman and his crime ring have made a fortune out of the illegal dealings, allegedly raking in NT$1.3 billion (US$43 million) over the past three years

Foxconn is addressing the issue by bringing the guilty to the fore through an internal inquiry. Foxconn has not made any comments on the product or the extent to which the fraud took place.

According to the local report, the Foxconn fraud was reported to Apple and it has launched a formal investigation regarding the issue. The investigation is being conducted by Apple's Business Assurance and Audit team (BA&A) which reports directly to the company's board of directors.

There have been several frauds and scams previously that center around the iPhone. We will share more details on the matter as soon as they arrive, so be sure to stay tuned in.

This is all for now, folks. What are your thoughts on the Foxconn fraud? Sound off in the comments, we would love to hear from you.

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