A man in Vermont who took advantage of a loophole in Tesla’s ordering system to take possession of half a million dollars in Teslas delivered without paying a dime received four years in prison this week.
According to federal prosecutors, 34-year-old Michael Gonzalez managed to figure out that Tesla’s online ordering system could allow you to place an order for a car without paying anything, according to Marketwatch. The key to exploiting the loophole was pretty simple:
Investigators say Gonzalez’s scheme was simple: He entered bank details into Tesla’s online payment portal that were attached to accounts that had little or no money in them.
Prosecutors said Tesla delivered the cars and certificates of ownership to Gonzalez in Vermont without waiting for the transactions to be completed. It was not until days later that Tesla received notice that the accounts Gonzalez had provided had insufficient funds.
The scheme started back in September, 2018 when Gonzalez placed an online order for a $US58,000 Model 3 with a $US2,500 deposit. Only when the car was set to be delivered did he provide info for the accounts with zero balances. By December he sold the car to a local dealer for $US42,000.
Authorities say Tesla delivered the cars to Gonzales without even waiting for the transactions to process; the company didn’t receive notice that the accounts Gonzalez used had no funds in them until days later. To make matters worse, Tesla provided Gonzales with certificates of ownership which not only allowed him to legally register and drive the cars, but also sell them.
His scheme continued on into 2019 when he managed to get four more Teslas.
Over the following year, prosecutors said Gonzalez repeated the scheme four more times, each time for a Model X worth around $US150,000. In two cases, he entered the name of a girlfriend or ex-girlfriend as the buyer instead of his own, according to court papers. He was able to sell two of the cars on Craigslist and eBay for $US108,000 and $US97,000, respectively.
After failing to receive a certificate of ownership for one of the Teslas, he drove it onto a frozen lake and set it on fire. He tried to file a claim with insurance, but the insurance company though the whole thing was suspicious and asked him to come in for an in-person interview. He never showed up. Authorities were tipped off not long after.
Gonzales was arrested on a separate charge—he lied on an application for a federal firearms license in which he stated he wasn’t facing any other criminal charges. After pleading guilty “to five counts of possessing and disposing of stolen vehicles,” he was sentenced to four years in prison. He also agreed to pay Tesla $US493,000 in restitution and to forfeit $US231,900 he made off selling the Teslas.
Image: Tesla
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