Apple supplier Foxconn to look into alleged fraud involving $43 million in flawed iPhone parts

A crime ring allegedly profited handsomely by selling iPhone components that were supposed to be destroyed. Foxconn said on Wednesday that an investigation has been launched into an alleged fraud.

Huang Tzu-ti, Taiwan News:

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

MacDailyNews Take: If true, it sounds like Foxconn’s Zhengzhou plant’s management staff has a few bad apples stealing bad Apples.


  1. Maybe if China lost manufacturing jobs to America, they might manage the process better. But then again, are the moral values in America there to thwart that from happening here?

  2. Several years back this same thing happened to Intel in the U.S. They caught as I remember, janitorial folks stealing and reselling barrel fulls of reject chips to an entity somewhere in the far east who resold them as good product.

    1. And let’s not forget the Chinese tasty milk scandal over a decade ago, where melamine was mixed in baby (milk) formula. Melamine is very nutritious…and used to make healthy food products like glues, adhesives and flame retardants.

      1. No, I haven’t forgotten, but I would venture a guess that more than 99% of people around the world have forgotten.

        The effect this scandal had on me: I looked at the ingredients and country of origin for the multi-vitamin/mineral supplement I took daily, as well as the ingredient sourcing for flaxseed oil, fish oil, and two other other supplements. ALL were from China.

        I emailed and sent via certified mail to the manufacturers of these supplements. I received a form letter response from only one company stating that there products “are of the highest possible quality”. I followed up with that one company asking whether or not they performed their own quality control and purity testing of the imported ingredients; there was no response from that company. I did the same with CVS, Target, and WalMart (stores where I have purchased these supplements) and — you guessed it — no response from any of them.

        The result: I stopped taking all supplements, and now focus on eating a wider variety of organic foods.

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