Arrests after Iran’s iPhone ban paves way for multimillion-dollar scam

At least one individual has been apprehended, and others are sought after a company defrauded individuals out of tens of millions of dollars by offering inexpensive iPhones following a ban on them in Iran.

A branch of Iranian law enforcement specializing in economic offenses stated on Friday that while the primary suspect associated with a firm named Kourosh Company had absconded the country, a "core member" of the company had been arrested, and two others are being pursued. It was declared that, in conjunction with the judiciary, "all assets belonging to the primary suspect have been seized," though the exact value of these assets was not disclosed.

Commencing last year, Iran prohibited the official registration of all new iPhone models manufactured by the United States-based tech corporation, Apple. This ban was recently extended, encompassing all iPhone 15 models.

All mobile phones imported into Iran must undergo registration upon entry, including those belonging to tourists; otherwise, they are deemed contraband and only receive network coverage for one month on any local SIM card.

Although the ban has caused disruption, all new iPhone 14 and 15 devices are being smuggled into Iran and are readily available in shops across the country. People have resorted to temporary workarounds to bypass the ban using spoofing methods, but the phones could still face disconnection after a period.

The prohibition has led to a flourishing black market for newer phones at exorbitant prices, significantly inflating the cost of purchasing an iPhone 13 – the last officially available model from Apple – to levels several times higher than international markets.

In Tehran shops, an Iran-registered base-level iPhone 13 Pro, a model that Apple no longer sells due to the release of newer handsets, was being sold for approximately 1.3 billion rials ($2,300) on Sunday.

Refurbished versions of the same phone can be purchased for around 650 million rials ($1,150), while the phone can be obtained for $800 or less in markets outside Iran.

The inflated prices in Iran are partly due to substantial registration fees paid to the government. Moreover, major manufacturers like Apple lack official vendors in Iran due to the country's isolation resulting from severe US sanctions.

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

Authorities argue that iPhones must be banned to prevent the expenditure of precious foreign currency, a necessity during Iran's economic challenges. However, they have not imposed bans on other non-US handset brands.

Notably, top Samsung flagship models were registered and available in Iran within 48 hours of their international launch in early February.

This environment provides opportunities for scammers like Kourosh Company to exploit unsuspecting customers or those seeking quick profits in Iran's struggling economy, characterized by persistent high inflation.

Initially presenting itself as Iran's "largest phone repair company," the company enticed customers with promises of selling iPhones at significantly discounted prices of 200 million rials ($360) or less, with delivery within weeks.

It remains unclear if any discounted phones were ever delivered. The individual purportedly leading the operation, identified as 27-year-old Amirhossein Sharifian by the state-linked Tasnim news website, has allegedly fled to neighboring Turkey.

The company reportedly amassed around 20 trillion rials ($35 million) within months. Questions linger regarding how it managed such rapid growth, particularly since Tasnim reported that Sharifian had evaded mandatory military conscription, which should have rendered him ineligible to register a company.

Kourosh Company's rapid expansion was significantly aided by a widespread public and online advertising campaign featuring numerous Iranian celebrities, including top footballers, actors, and influencers.

Although the company has collapsed, the aftermath has been marked by the silence of many celebrities, some offering apologies, while others defiantly deny responsibility for individuals' choices.

Hossein Rahimi, a senior police official, stated that "unfortunately, some renowned and recognized figures endorsed this company during its operation, and their cases will be investigated." However, he did not provide details on further actions or name any suspects, but he encouraged those who suffered financial losses to file reports with the police.