FORTUNE -- Talk about an ironic twist. Even as Apple (AAPL) was being lambasted daily in Chinese state-run media for what was being portrayed as unfair iPhone return policies, the company was investigating a ring of Chinese scammers taking advantage of those same policies to rip the company off.
According to a report Monday in The Register, five employees at an electronics store selling Apple goods were arrested in Wenzhou, China, after they submitted 121 fake iPhone 4S "BAND parts" (it's not clear if these are modem assemblies or motherboards or what) to Apple, claiming they were defective and needed replacing. Apparently the scammers would buy a back cover, battery, and other components, re-assemble the device and sell it as a new iPhone.
"It took Apple over a month to spot the scam," The Register's Phil Muncaster reports, "after which the owner of the store in question was informed and an investigation begun. On April 1 police finally cuffed a shop engineer and her boyfriend as the ringleaders."
As it turns out, the arrest took place the same day Tim Cook issued an apology to Apple's Chinese customers and changed the company's return policy, guaranteeing that any iPhone 4 and 4S brought in for repair under warranty in China would be replaced with new (not refurbished) parts.
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