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The Taiwanese manufacturer Foxconn has been an Apple producer for many years and is often in the spotlight. But this time it is about a massive fraud in the iPhone business - possibly the biggest one yet.
Specifically, high-ranking Foxconn managers are said to have produced iPhones without Apple's knowledge. These models were illegally assembled using defective components - that is the allegation. The fraud is said to have generated around 43 million US dollars over a period of around three years. The Taiwan News reports as follows:
Taiwanese electronics maker Foxconn said on Wednesday (December 18) that it has launched an investigation into an alleged scam involving employees selling iPhones with defective components. A Taiwanese businessman allegedly worked with a group of executives at Foxconn's Zhengzhou site to source and assemble faulty iPhone parts, which were then sold under the guise of iPhone products made at the Chinese manufacturing facility. The defective components would have been destroyed under standard procedures. The businessman and his crime ring have made a fortune from the illegal dealings, reportedly raking in NT$1.3 billion (US$43 million) over the past three years.
Specific details of the process are not yet known. However, it seems that the management team responsible for destroying defective components played a major role in it. They are said to have sold the components to the fraudsters, who then assembled the devices and sold them to unsuspecting customers. According to a local report, an investigation is being carried out by the Apple Business Assurance & Audit (BA&A) team, which reports directly to the company's board of directors. The whole case is said to have been sparked by an anonymous email sent directly to Tim Cook. There have always been fraud attempts involving iPhones, but this scale is new even for the iPhone. If the allegation turns out to be true, it could be the largest known case of fraud involving a manufacturing partner. (Photo by Parilov / Bigstockphoto)
