A Vermont man who managed to trick Tesla into delivering him five cars worth $560,000 without paying was sentenced to four years in prison.
According to federal prosecutors (via MarketWatch), Michael Gonzales exploited a loophole in the automaker’s online ordering system that allowed him to take delivery of five Tesla vehicles although he had no intention to pay. He later sold three of the vehicles to unsuspecting buyers at knockdown prices totaling $231,900.
How exactly was he able to do that? Investigators found that the 34-year-old resident of Shelburne, Vermont, entered bank details into Tesla‘s online payment portal that were attached to accounts containing little or no money.
Tesla would then deliver the cars and certificates of ownership to Gonzales without waiting for the transactions to be completed. Days later, the automaker would receive notice that Gonzalez’s accounts had insufficient funds.
Gonzalez first used the scheme in September 2018, according to prosecutors, when he placed an order on Tesla’s website for a $58,000 Model 3. He made a deposit of $2,500, and when the car was ready to be shipped the following month, he gave Tesla bank information for accounts that didn’t have enough money to cover the balance.
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Tesla delivered the vehicle to Gonzales in Vermont and gave him a certificate of ownership, which allowed him to obtain the car’s title and register it with the Vermont DMV. A week later, Tesla received notice that there were insufficient funds in Gonzalez’s account to complete the transaction. By the end of December 2018, Gonzales had sold the Model 3 to a used-car dealer for $42,000.
Prosecutors said he repeated the scheme four more times over the following year, each time for a Model X worth around $150,000. In two cases, he used the name of a girlfriend or ex-girlfriend as the buyer instead of his own. He sold two of the cars on Craigslist and eBay for $108,000 and $97,000, respectively.
Gonzalez was only caught after he set one of the five cars on fire for insurance money. After he was unable to secure the title for one of the cars, a $153,000 Tesla Model X, Gonzales drove the car onto a frozen section of Lake Champlain and set it on fire, prosecutors said.
He then filed an insurance claim, but when the insurance company asked him to come for an in-person “examination under oath,” he failed to appear for the interview, according to court documents seen by MarketWatch. This obviously raised suspicions, and authorities picked up the case.
After his arrest on a separate federal charge, Gonzalez pleaded guilty to five counts of possessing and disposing of stolen vehicles in April, days before a trial was scheduled to begin in the case. He agreed to pay Tesla $493,000 in restitution and forfeit his $231,900 in profits to the government as part of his plea deal.
