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iPod repairman bilks Apple

by on23 March 2009

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Lifts more than 9,000 iPods

An Apple iPod owner has reportedly duped Apple out of more than 9,000 replacement iPod Shuffles, according to court documents filed last week. Nicholas Woodhams of Kalamazoo, Michigan, had set up iPod repair businesses and two Web sites under the names iPod Mechanic and iMechanic and managed to convince Apple that he had valid replacement iPod claims, when in fact he used real iPod serial numbers that he had downloaded from an Apple Web repair site.

U.S. government prosecutors have filed felony fraud and money-laundering charges against Woodhams for reselling thousands of replacement iPods for $49 each. Woodhams sent more than 5,000 packages from March 2006 through October 2007 through the U.S. Postal Service and a UPS store rented mailbox. He relied on Visa-branded gift cards to cover the $1 pre-authorization fee that Apple charges for running verification on its replacement iPod program.

When Apple later tried to charge the Visa cards for the cost of the replacement iPod after the alleged “broken” iPod did not materialize, the charges were rejected because the Visa card funds were not available. Apple initially filed a lawsuit directly against Woodhams last year for fraud and other charges, claiming that it had been scammed out of more than $75,000; this case is currently pending in lieu of the new federal charges filed. The U.S. suit is seeking forfeiture of Woodham’s real estate and real property and more than $571,000 in cash, which are all alleged to be part of his proceeds from the iPod scam.

Last modified on 23 March 2009
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