A businessman who orchestrated a $50 million iPod investment scam on the University of Miami campus must spend 17 years in prison, a judge ruled.
According to the Miami Herald Andres Leonel Pimstein pleaded guilty to a dozen wire-fraud counts in December and now must turn over 5,540 of the Apple devices and a Fidelity investment account totaling $138,522.
According to the U.S. attorney's office in Miami at least 146 investors suffered losses totaling about $40 million.
Pimstein promised a return of up to 36% for investing in his business idea. He told investors that he was purchasing iPods at wholesale prices and reselling them to department store chain in Chile and that they were going to pay above market prices.
Unfortunately he was running a Ponzi scheme. Pimstein took the initial investors money and paid them back with money from new investors. He even recruited other investors to earn even more by acting as agents who recruited more people to back his venture.
Since no real revenue was being generated the money eventually ran out. Prosecutors said Pimstein used the funds to pay off a home mortgage, auto loans, and to pay child support.
Read More
According to the Miami Herald Andres Leonel Pimstein pleaded guilty to a dozen wire-fraud counts in December and now must turn over 5,540 of the Apple devices and a Fidelity investment account totaling $138,522.
According to the U.S. attorney's office in Miami at least 146 investors suffered losses totaling about $40 million.
Pimstein promised a return of up to 36% for investing in his business idea. He told investors that he was purchasing iPods at wholesale prices and reselling them to department store chain in Chile and that they were going to pay above market prices.
Unfortunately he was running a Ponzi scheme. Pimstein took the initial investors money and paid them back with money from new investors. He even recruited other investors to earn even more by acting as agents who recruited more people to back his venture.
Since no real revenue was being generated the money eventually ran out. Prosecutors said Pimstein used the funds to pay off a home mortgage, auto loans, and to pay child support.
Read More