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VIRTUALISATION iPonzi scheme nets perpetrator 17 years
VIRTUALISATION iPonzi scheme nets perpetrator 17 years | iPonzi scheme nets perpetrator 17 years |
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| by Jake Widman | |
| Tuesday, 24 March 2009 | |
  
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Instead, Pimstein made up false invoices demonstrating the sales but kept his investors’ money, using the funds from new investors to pay off the older ones -- a classic Ponzi scheme. He also recruited agents, who were unaware of the scam, to round up more investors. According to the criminal charges, "Pimstein made 'interest payments' to the agents that were purportedly derived from the sale of products to Ripley. The agents, in turn, distributed a percentage of the 'interest payments' to their investors and retained the difference as a commission." But Pimstein ran out of capital last April, and in December pled guilty to 12 counts of wire fraud. In addition to his 17-year prison sentence, he must also return more than 5,000 iPods and turn over an investment account totaling nearly $140,000. Pimstein's sentence comes less than a week after news of another iPod fraud , that one based on phony warranty replacements. |
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