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Sep 15, 2009

Guy stealing on ebay compared to Bernie Madoff

A frum guy in New Haven scammed customers on eBay out of hundreds of thousands of dollars selling equipment he never had any intention of actually delivering.

In a sentencing memo, she argued that his unusual background made him unequipped for the business world. Levitansky was raised in an Orthodox Jewish family in the Beaver Hills neighborhood. His parents put him through years of religious day camps, summer camps, then a Talmudical seminary in California, all in hopes that he would become a rabbi. Following his parents’ wishes after high school, he volunteered alongside a rabbi doing community outreach in Florida, then attended another Talmudic seminary in New York run by the Chabad movement.

The young man didn’t take to the line of work, however.

“Mr. Levitansky did not want to become a rabbi,” wrote Merriam. At age 18, he withdrew from the seminary. In 2007, he started his own business, Bluetooth Kings LLC.

He didn’t start out intending to scam anyone, Merriam argued: Levitansky just got in over his head. By May 2008, the orders were rolling in with such volume that the young man couldn’t handle it.

“Things quickly got out of hand, and Mr. Levitansky became completely overwhelmed,” Merriam wrote. “As a young man who had been raised with the idea that he would one day become a rabbi, Yochi Levitansky was ill-prepared for the challenges of running a business on his own.”


In his sentencing, the judge, based on the prosecutions arguments, said that the crime was not just against his customers, and he did not do damage just to ebay, but he damaged the whole internet as actions like his undermine the faith people have in making transactions over the internet.

The case was about much more than money, he argued — it’s about the foundation of the Internet marketplace.

As more people turn to the Internet to buy goods, they need to be able to have faith that anonymous sellers won’t rip them off, Chang argued. Though the customers Levitansky swindled have mostly been repaid by eBay, he said, “they will have the memory of being defrauded.”

They even compared him to Bernie Madoff:

Dorsey said while a longer prison sentence wasn’t necessary, Levitansky does need some prison time to teach him respect for the law and to deter him from repeating the crime.

“That’s a lot of money,” the judge said of the swindled $237,257. He called the defendant “well short of Bernie Madoff, but somewhat tracking in that same direction.”

A comparison to Madoff seems to be a bit of an exaggeration, in my opinion... This was purely criminal as he took people's money and never delivered the product he was selling them. What does this have to do with fraud and Ponzi schemes to the tunes of $50 billion, or whatever the final numbers were?

At least he is trying to make good on the money he stole:

In defense of her client, Merriam said the case was “solely about money.” She said the case was really a civil matter, and that the debt owed to eBay was a drop in the bucket compared to the company’s profits. She argued that the behavior was extremely out-of-the-ordinary for the young man, who has no prior criminal record and comes from a supportive, educated family.

Merriam said her client intends to fully pay the company back — he already got a job as a maintenance worker, fixing sinks to dig out of debt. Levitansky can pay it back quicker if he can stay employed instead of going to prison, she argued. She urged the judge for probation instead of prison, arguing that the quarter-million dollar restitution would be sufficient punishment.

6 comments:

  1. I bet he only eats Mehadrin hashgochos and goes to the mive daily

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  2. maybe. but should somebody who does something wrong all of the sudden not be makpid in other areas of his jewish life (I am not talking about demanding special food in prison or anything like that). Should he not buy mehadrin food just because of this?

    From the article he sounds like a guy who got in over his head, made mistakes, was in a business he was never trained and had no idea how to deal with the situation. It does not sound like he was thief or con-man (even though that was the unintended result).

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  3. I am not defending him, but he doesn't sound like a fellow with evil intentions, and I see no contradiction to the level of his adherence in other aspects of Judaism.

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  4. Seems to me financial crimes in the US have been getting a severity of sentencing way out of proportion to violent crimes. I could make various statements about that not being a surprise for the US, but still it's reached a different level.

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  5. It might have been a seemingly heavy punishment, but come on. A person doesn't *mistakenly* list $237,000 worth of electronics on ebay. And that doesn't happen overnight. If it was 1/10th of that and he had stated that expected shipments of suplliers never materialized or some such thing, I could maybe understand that. But intentionally listing items that you know are not shipping is downright fraud and theft.

    ReplyDelete

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