Apple warranty fraud is a great way to make money. I know of a guy who between 2008 and 2010 would purchase used iPod lots from Costco Electronic Hardware Services, refurbish the water damage indicator in the headphone jack and dock, and then try to return the iPod to one of the few Apple stores in the Seattle area. The refurbishing method would consist of cutting tiny strips of white wax paper, applying a little adhesive, and then sliding the paper flush down the hole. When Apple caught onto this guys method, he would later take the whole headphone assembly apart by using a pen knife to lift the plastic around the headphones, pulling the jack out, and using whiteout to cover the other end.

I went to the Apple store with this guy and felt ashamed just being around him as he dropped off a dozen water damaged iPod Nanos, each with an appointment, telling the guy that they were from guys in Iraq, as if that were to add some emotional weight to getting new ones.

Nearly a decade later I found out the guy was running the same scam with the iPhone SE by using reassembled water damaged phones or dummy phones from China. I am guessing he didn't get caught because the scale of his operation were a few at a time, maybe a couple hundred in a year, but not thousands over a year.

Now that I think about it, I had let him use my Apple account for appointments and claims, and ever since then, I have always had a bad time working with the genius bar over things that I bring in.