Iranian Authorities Make Arrests Following Ban on iPhones, Leading to Multimillion-Dollar Scam in Technology Sector

An investment scam that pledged affordable iPhones in Iran’s unstable market was able to collect approximately $35 million in a few months.

In the capital city of Iran – At least one individual has been apprehended and others are being pursued after a business defrauded individuals out of tens of millions of dollars, guaranteeing reasonably priced iPhones despite a ban on them in Iran.

An Iranian law enforcement department dedicated to financial offenses declared on Friday that the primary suspect in the case of Kourosh Company had fled the nation, but a “key participant” of the company has been arrested and two others are being pursued.

It revealed that, in collaboration with the legal system, “all the assets of the main suspect of the case were seized” without disclosing the value of the assets.

Commencing last year, Iran banned formal registration of all new iPhone models created by United States tech giant Apple. The ban was extended this year, impacting all iPhone 15 models.

All phones brought into Iran must be registered upon entry – even those belonging to tourists – or else they are considered illegal and only have network coverage for one month on any local SIM card.

All new iPhone 14 and 15 gadgets are being smuggled into Iran and can easily be found in stores in Tehran and throughout the nation, but the ban has caused turmoil.

Individuals have discovered momentary workarounds to bypass the ban with spoofing techniques, but the phones could still be disconnected after some time.

A disordered market

The ban generated a black market for more recent phones at exorbitant prices and drove up the price of acquiring an iPhone 13 – the most recent phone officially available from Apple – to levels several times higher than international markets.

An Iranian-registered base-level iPhone 13 Pro, a phone that Apple has not marketed since newer gadgets were released, was being exchanged at Tehran outlets on Sunday at a staggering 1.3 billion rials – about $2,300 at the present open market rate.

Repackaged and refurbished variants of the same phone can be bought for around 650 million rials ($1,150). The phone can be purchased for $800 or less in markets outside of Iran.

Part of the markup in Iran is due to substantial registration fees, which go to the government. Additionally, significant manufacturers like Apple do not have official sellers in Iran because of the nation’s isolation from global markets due to severe US sanctions.

Local vendors also regularly adjust their prices, citing fluctuating foreign currency rates, making many phones unaffordable for the majority of Iranians.

Authorities have asserted that iPhones should be banned because importing them would deplete valuable foreign currency at a time when Iran needs it most, but they have not banned any other non-US gadgets.

Top Samsung flagships were registered and available in Iran at the commencement of February less than 48 hours after the global debut.

Assurance of speedy funds

This situation provides con artists like Kourosh Company with a fantastic opportunity to deceive unwary clients or those seeking to make a swift profit in Iran’s failing economy, characterized by consistently high inflation.

The company, which initially presented itself as Iran’s “most extensive phone repair organization”, informed clients that it would sell them iPhones at an incredibly discounted price of 200 million rials ($360) or less, with the condition that it would deliver the phones within weeks.

It is uncertain if any affordable phones were dispatched, but the individual running the enterprise, recognized by the state-linked Tasnim news website on Saturday as 27-year-old Amirhossein Sharifian, has reportedly fled to nearby Turkey.

The company seemingly enticed approximately 20 trillion rials ($35 million) within a few months.

It remains uncertain how it managed to rapidly expand, particularly considering that Tasnim also asserted that Sharifian had avoided obligatory military conscription, which should have made him incapable of registering a company in the first place.

Largely, Kourosh Company was supported by a massive public and online ad campaign it initiated utilizing a variety of Iranian celebrities, from prominent footballers to actors and influencers.

National football team goalkeeper Alireza Beyranvand and actor Akbar Abdi were among dozens of Iranian celebrities who recorded individualized messages in Kourosh Company offices to wholeheartedly prompt people to seize a once-in-a-lifetime opportunity.

Since the company shut down earlier this week, most of those celebrities have remained silent, while some have expressed regret, and others have defiantly insisted that it was not their responsibility that people made this selection.

“Unfortunately, some distinguished and recognized figures endorsed this company during its operation, whose liabilities will also be pursued,” Hossein Rahimi, a senior police official, was quoted as saying by state-linked media on Friday.

He did not elaborate any further actions or mention suspects, but stated that those who have suffered financial losses may register a complaint with the police.

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