SINGAPORE: A Singaporean teenager conspired with an American to commit fraud against Microsoft by making false warranty claims to obtain 56 laptops worth $143,144 ($192,900).
The defendant, now 20, claimed the laptops were sold and he used the proceeds to buy Bitcoin but “lost everything” after the Bitcoin price crashed in 2018.
The offender cannot be named as he was under 18 at the time of the offenses and was therefore protected by the Children and Young Persons Act.
He pleaded guilty in court on Tuesday (February 22) to one count of conspiring to deceive Microsoft and three counts of acquiring property that were advantages of criminal conduct. Seven other charges will be considered at sentencing.
The court heard that the defendant was 16 at the time of the offenses in 2017. He became acquainted with a US citizen known as Justin David May, who was based in the United States at all times, through a private online forum. May’s age was not stated in court documents.
Forum members discussed methods for exploiting advance warranty programs from entities selling electronics. Such schemes involved making fraudulent warranty claims to obtain replacement devices, while failing to return allegedly defective devices.
THE ACCUSED DISCOVERED A CHEAT CHANCE
Between August 2017 and October 2017, the defendant discovered that Microsoft Surface laptops were being sold online for US$800, less than half their retail price.
He also realized that Microsoft Surface laptop serial numbers with valid warranties could be purchased from some online forum users for around US$25 each.
He shared this opportunity to leverage Microsoft’s Advance Warranty Program and told May about it.
Together they agreed on a modus operandi: the defendant would purchase laptop serial numbers online with valid warranties and use them to make advance exchange warranty claims with Microsoft claiming that the devices were faulty.
In warranty claims, it would list an address in the United States provided by May for Microsoft to deliver replacement devices.
The defendant would then give May the delivery tracking numbers to notify her of incoming shipments, and Microsoft would deliver the devices to the US addresses provided.
Once May received the laptops, he would consolidate them and ship them to the defendant’s apartment in Tampines.
As part of their deal, May would keep one to two laptops for himself, for every five to eight laptops he would receive.
On 56 occasions between August 2017 and October 2017, the defendants submitted false advance exchange guarantee claims to Microsoft for 56 laptops, while based in Singapore.
He submitted the complaints online or over the phone, using a fictitious name, email address and phone number. If he was submitting the claims over the phone, he was using an app that made it look like he was based in the United States.
Microsoft was tricked into delivering 56 laptops worth US$143,144 to multiple addresses in the United States as a result of the deception.
After receiving the laptops at his Tampines apartment, the defendant sold them on Carousell for between S$1,700 and S$2,500 each. He sold a total of 75 Microsoft Surface laptops on the platform, but investigations failed to find out how he got the other 19 laptops.
May was indicted in the United States in January 2018 for offenses including mail fraud committed against Microsoft.
In May 2018, the Singapore Police Department of Business Affairs received information from the United States Federal Bureau of Investigation (FBI) that the accused conspired with May to commit the fraud against Microsoft.
The defendant claimed to have used the proceeds from the sale to buy Bitcoin, but lost everything after the Bitcoin price crashed in 2018. He returned part of S$10,000 to Microsoft in August 2021.
The court requested a probation fitness report and adjourned sentencing until next month.
May was sentenced to seven years and eight months in prison and ordered to pay more than US$4 million in restitution after pleading guilty in two separate cases to 42 counts of mail fraud, 10 counts of money laundering, three counts of interstate transport of goods obtained by fraud and two counts of tax evasion.
The US Department of Justice said May’s convictions stemmed from separate schemes he perpetrated to defraud Cisco Systems, Microsoft, Lenovo Group and APC by Schneider Electric using computer equipment.