Date: 03-27-2024

Case Style:

United States of America v. David Shemtov

Case Number: 1:21-CR-123

Judge: J.P. Boulee

Court: The United States District Court for the Northern District of Georgia (Fulton County)

Plaintiff's Attorney: The United States Attorney’s Office in Atlanta

Defendant's Attorney: Warren Carl Lietz, III - 404-658-9070

Description:

Alanta, Georgia criminal defense lawyer represented the Defendant charged with Cell Phone Trade-in Fraud Scheme.

California Man Sentenced for Cell Phone Trade-in Fraud Scheme

David Shemtov was sentenced after a jury convicted him of wire fraud based on a scheme involving the fraudulent trade-ins of thousands of cell phones.

“The ability to exchange electronic devices for cash value or gift cards provides users the important benefit of recovering some worth for devices they no longer need,” said U.S. Attorney Ryan K. Buchanan. “Shemtov chose to exploit this process to fraudulently obtain substantially inflated value for devices he traded and at great expense to the victim company. His sentence of imprisonment should serve as a warning to others that this fraudulent activity will be prosecuted.”

“Shemtov used lies and schemes to pad his own pockets, causing financial harm to the companies and ultimately costing consumers more money,” said FBI Atlanta Assistant Special Agent in Charge Sean Burke. “Today’s sentence sends a clear message to others who think they will not be caught – FBI Special Agents will find you.”

According to U.S. Attorney Buchanan, the charges and other information presented in court: David Shemtov facilitated a year-long fraud scheme in which he developed a method to deceive a cell phone trade-in company about the nature of the cell phones in which he was trading. The cell phone trade-in process was handled by a third-party provider (the Victim Company) that oversaw the mailing and receipt of the devices, and the reimbursement payments – typically in the form of Apple gift cards. After experimenting through systematic trial and error, Shemtov uncovered a feature of the Victim Company’s trade-in program that allowed for manipulation of the nature and value of the phone trade-in by the customer.

To perpetrate the scheme, Shemtov lied about the phone model, used false names, adjusted the settings of every phone that he sent for trade-in, and remotely unlocked the phones. To avoid detection, he opened post office boxes in multiple states and used dozens of fake names and different email addresses. Shemtov’s conduct caused the Victim Company to pay substantially more than the true value of these devices. For instance, more than 500 of the trade-in requests claimed to be for an iPhone XS Max, for a trade-in value of $550.00 when, in fact, the devices were iPhone 6’s, with a trade-in value of only $60.00. Shemtov initiated over 8,000 cell phone trades and successfully tricked the company more than 1,000 times, receiving an overpayment of more than $450,000.00.

Shemtov, 31, of Los Angeles, California, has been sentenced to three years, one month in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $532,542.00, as well as a fine of $100,000.00. Shemtov was found guilty by a jury on November 20, 2023.

This case was investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorneys Angela Adams and Alison B. Prout prosecuted the case.

Outcome:

Defendant was found guilty and sentenced to three years, one month in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $532,542.00, as well as a fine of $100,000.00

Plaintiff's Experts:

Defendant's Experts:

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