Apple must face claims it profited from stolen gift card scheme

A judge says Apple will have to face claims it benefited from a stolen gift card scheme because it refused to refund scammed funds.

As reported by Courthouse News Service on Tuesday:

Apple will have to face claims the company profited off of criminal enterprise schemes featuring stolen gift cars after a federal judge declined to dismiss claims the company benefitted monetarily from sophisticated schemes that employ fake apps to swindle consumers.

A district judge dismissed most of a lawsuit against Apple but says “plaintiffs plausibly alleged the company did receive some of the proceeds from the fraud and failed to appropriately reimburse the victims.”

In a written judgment Judge Edward Davila ruled that Apple “stands to benefit from proliferation of the scam” and that it was fully capable of determining which accounts redeemed stolen gift card funds to prevent them from paying out, but instead chooses not to.

Scammers targeted victims by giving “an urgent reason” to turn over money, encouraging people to buy gift cards and provide the codes, before either selling on the funds or spending the money.

One of the scams involved hustlers spending the stolen funds in apps hosted on Apple’s App Store that they themselves owned as a means to transfer stolen funds. Apple would have received some of the money in these transactions because of its 15/30% App Store fees.

A judge did not accept Apple’s argument that it could only operate within its stated refund policy, and said that “by refusing to refund the scammed funds, Apple prevented them from taking possession of their property and, indeed, benefitted from perpetuation of the scam.”

The case will now move to discovery and document production.

In April a man was sentenced to 60 months in prison and made to pay back $1.26 million by the DoJ over a gift card scam that saw him issue himself thousands of dollars in fraudulent gift card funds by stealing point-of-sale devices from Apple store employees and then issuing credits in his own name.

A judge says Apple will have to face claims it benefited from a stolen gift card scheme because it refused to refund scammed funds.

As reported by Courthouse News Service on Tuesday:

Apple will have to face claims the company profited off of criminal enterprise schemes featuring stolen gift cars after a federal judge declined to dismiss claims the company benefitted monetarily from sophisticated schemes that employ fake apps to swindle consumers.

A district judge dismissed most of a lawsuit against Apple but says “plaintiffs plausibly alleged the company did receive some of the proceeds from the fraud and failed to appropriately reimburse the victims.”

In a written judgment Judge Edward Davila ruled that Apple “stands to benefit from proliferation of the scam” and that it was fully capable of determining which accounts redeemed stolen gift card funds to prevent them from paying out, but instead chooses not to.

Scammers targeted victims by giving “an urgent reason” to turn over money, encouraging people to buy gift cards and provide the codes, before either selling on the funds or spending the money.

One of the scams involved hustlers spending the stolen funds in apps hosted on Apple’s App Store that they themselves owned as a means to transfer stolen funds. Apple would have received some of the money in these transactions because of its 15/30% App Store fees.

A judge did not accept Apple’s argument that it could only operate within its stated refund policy, and said that “by refusing to refund the scammed funds, Apple prevented them from taking possession of their property and, indeed, benefitted from perpetuation of the scam.”

The case will now move to discovery and document production.

In April a man was sentenced to 60 months in prison and made to pay back $1.26 million by the DoJ over a gift card scam that saw him issue himself thousands of dollars in fraudulent gift card funds by stealing point-of-sale devices from Apple store employees and then issuing credits in his own name.