Atlanta man indicted on multiple counts of bank fraud and identity theft based on falsified money orders
ATLANTA - David Shemtov has been arraigned after being charged with eight counts of wire fraud for his role in a scheme to fraudulently inflate the reimbursement value of more than 1,400 electronic devices that he submitted for trade-in.
“The ability to trade in electronic devices for cash value or gift cards allows users to recover some value for devices they no longer need,” said Acting U.S. Attorney Kurt R. Erskine. “Shemtov allegedly found a way to exploit this process to recover many times the value of the actual devices he traded in.”
“This alleged fraud scheme not only hurt the victim company, but potentially hurt consumers,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The courts will now decide Shemtov’s fate for allegedly choosing his own self-interest and greed over legitimate business transactions.”
According to Acting U.S. Attorney Erskine, the indictment, and other information presented in court: From approximately October 2019 through January 2020, Shemtov allegedly participated in a scheme to submit more than 1,400 fraudulent electronic device trade-in requests online. On Internet trade-in request forms, the trade-in requests purported to have newer, higher-valued devices, typically an iPhone XS Max, to trade in. The trade-in requests provided multiple different post office box locations as the addresses where the shipping boxes should be sent and used more than a dozen fictitious names. In reality, Shemtov never intended to trade in the higher-valued devices identified in the trade-in requests. Instead, substantially less valuable devices–typically iPhone 6s and 7s–were sent in.
The device 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. The victim company paid substantially more than the true value for the devices sent in as part of the scheme. For instance, more than 900 of the trade-in requests claimed to have iPhone XS Max with 64 gigabyte capacity, for a value of $545, but the devices mailed in were various versions of iPhone 6’s, with a trade-in value of $30.
After the victim company detected the scheme, from about March 2020 through December 2020, Shemtov submitted more than 1,000 additional trade-in requests using more than 100 fictious names. The victim company flagged these requests and did not complete the trades.
David Shemtov, 28, of Los Angeles, California, was arraigned before U.S. Magistrate Judge Christopher C. Bly. Shemtov was indicted by a federal grand jury on April 6, 2021. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Alison B. Prout is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.