iPod Ponzi Scheme = 17-year Prison Sentence

By Nicole Martinelli (3:05 am, Mar. 23, 2009)

A businessman who ran a $50 million iPod investment scam was sentenced to 17 years in prison by a federal judge in Miami.

Andres Leonel Pimstein, who pleaded guilty to a dozen wire-fraud counts in December, must also turn over 5,540 of the Apple devices and a Fidelity investment account totaling $138,522, U.S. District Judge Adalberto Jordan said.

It was a simple enough scheme: Pimstein bough iPods at wholesale prices and resold them to a department store chain in Chile. The chain, named Ripley, was supposedly going to buy the iPods from him at above-market rates.

But there was one slight problem: it was a Ponzi scheme.

‘In exchange for their work, Pimstein made `interest payments’ to the agents that were purportedly derived from the sale of products to Ripley,” according to the criminal information charging him with wire fraud. ‘The agents, in turn, distributed a percentage of the `interest payments’ to their investors and retained the difference as a commission.”

Pimstein was accused of creating false invoices to document the purported purchase and sale of the iPods.

Via Miami Herald

Image used with CC license, thanks to FHKE

Posted by Nicole Martinelli in Cult of Mac, iPod, iPod Touch | Comment on this article

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About the author

nicole_martinelli

Nicole Martinelli was born in San Francisco and has lived in Milan and Florence, Italy. Cultish tendencies and love for DIY increased while living on the Old Continent, where tech came late and cost more in Big Mac index terms. She's written for Wired.com, The New York Times and Newsweek. Since 1999, she's been tapping away at zoomata. You can also find her on Facebook, Linked in and Twitter.

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2 comments

    iPonzi! I also read about the guy who scammed Apple out of 9,000-something iPods. That’s crazy.

    Torley, on March 23rd, 2009 at 8:57 pm

    [...] [via Cult of Mac] [...]

    $75 million iPod ponzi schemer earns a 17 year prison sentence - Australian Macworld, on July 7th, 2010 at 12:08 am