iPod scammer off to prison

Jake Widman
Thursday, 27 August 2009 01:09

IT Industry - Market

The Michigan man accused of fraudulently obtaining iPods and reselling them has been sentenced to prison. He had pled guilty to the crime and was also assessed significant financial penalties.

Back in March, prosecutors charged Nicholas Woodhams, 23, with falsifying iPod serial numbers in order to obtain "replacement" iPods under Apple's warranty program.

He resold the devices online for $49 each. Federal prosectors said that over the year and a half Woodhams ran the scam, he received and resold more than 9,000 iPods.

He then compounded the crime by wiring $200,000 of his ill-gotten gains to a brokerage account.

In April, Woodhams pled guilty to mail fraud and money laundering and agreed to forfeit property, described by U.S. attorney Donald A. Davis as "a home in Portage, Michigan, an Audi S4 sedan, an Ariel Atom 2 racing car, a Honda motorcycle, six computers, and more than $570,000 in U.S. currency."

Now the second shoe has dropped. U.S. District Court Judge Robert Holmes Bell has ordered Woodhams to reimburse Apple to the tune of $648,568 and to pay the U.S. Postal Service $8.066.

Bell also sentenced Woodhams to prison for 13 months. "This was not a victimless crime because the the costs of fraud are borne by both the consumer and the taxpayer," said Davis.

Woodhams had run an iPod repair service. When iTWire first reported this story in March, we were contacted by another Michigan repair service, Rapid Repair, that wished to emphasize that it was not the one accused of wrongdoing.

It would probably like to make that point again today.