A man in the US has been charged with felony mail fraud and money laundering for allegedly tricking Apple into sending him about 9000 iPod shuffles which he sold online for $US49 each.
Nicholas Woodhams ran an iPod repair business, titled “iPod Mechanic,” “iMechanic,” and “Pod Tradeup”, according to Information Week.
Apple has filed a civil fraud lawsuit against Woodhams last year, but the case was delayed due to the Attorney’s Office building an investigation of its own.
The warranty program for iPod devices allows customers to receive a replacement unit
before the broken unit is returned, and requires a serial number of the original device.
After a claim by a user is submitted, Apple charges a $1 pre-authorisation fee on a credit card and then ships the repaired unit back, waiting 10 days for the replacement unit to be returned or the card is charged.
But Woodhams allegedly discovered how the serial numbers were formatted, and used several stored-value Visa cards to submit guessed serial numbers to receive replacement iPod shuffles for units they hadn’t purchased.
Woodhams then allegedly sold the devices to customers for discount prices, but still managing to make a profit.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
