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Judgment day for head of used phone scheme: pay up $42 million 

He earned millions scamming people & now he has to pay it back, says judge.

 

***Updated on 5-22-17 at 1:45 pm with new information from the FTC about what happens if he does not pay***

 

He spent five years ripping people off, tricking them out of their used phones and amassing $42 million in profits, the Federal Trade Commission said.

Now Vadim Kruchinin has a week to pay it back.

Today, a judge ordered a judgment against him for the $42,427,260.57 that the FTC said he earned as head of Laptop and Desktop Repair in Sparks, Nevada.

That money will go to pay back the thousands of customers who said they lost their phones, laptops and tablets to him through lies and deceit, and to other costs, the order said.

If he pays up.

At last check, Kruchinin — who also goes by the name David Kruchin — had left the U.S. for China after the FTC shut down his business on September 29, 2016.

“Sad to think others have to make a living by scamming innocent people instead of doing it the other way, which is earn your money the legal way and work hard for it,” said Tiffany Narveson, one of his victims in Oregon.

 

Judgment against Vadim Kruchinin and Laptop & Desktop Repair signed May 19, 2017.

 

Ban

The judge ordered not just a big money judgment, but also a list of things Kruchinin must do from now on.

He’s permanently banned from working in the used-electronic-devices-buying business.

He can’t pretend he’ll give you a high price for your used phone or laptop, but really give you a check for a fraction of the offer.

He can’t pretend you’ll get your phone back if you don’t like the paltry sum he offers you.

“There is a substantial likelihood that Defendants [Kruchinin and Laptop and Desktop Repair] will engage in the same or similar activities as alleged in the Complaint unless they are permanently enjoined from such acts and practices,” the order said.

 

Complaint on Sitejabber about a Kruchinin company called Sell Your Cell.

 

The scheme

Victims said that was indeed his scheme, running under many different names, like cashforiphones.com, cashforlaptops.com, ecyclebest.com and more.

Narveson said she was quoted more than $400 for her nearly-new phone through the site eCycle Best, but instead received a check for less than $50.

She called the company to try to get her phone back as promised in the site’s return policy, but was told her phone was already processed, she said. The check then bounced.

More than 2,600 customers like Narveson filed complaints with the Better Business Bureau.

“They say once a scammer always a scammer,” Narveson said. “They never see what they did is wrong, especially when he got away with it by leaving.”

 

Complaint on Sitejabber about a Kruchinin company called Sell Your Cell.

 

Following the rules

What’s to stop him from doing again?

The judgment lays out some steps Kruchinin must follow.

In one year, he has to submit a compliance report, showing where he lives, where he works, what his businesses are doing, and how he is in compliance with the order.

For the next five years, he has to give people he’s running businesses with a copy of the judgment order, and have them sign a document saying they received it.

For the next 20 years, he has to let the FTC know if he moves, changes his name, changes his business, or files for bankruptcy, as well as keep records on how much money he’s made and who he’s worked with.

If the FTC asks for those records, he has to deliver within 14 days.

 

Inside the Laptop & Desktop Repair warehouse in Sparks, Nevada. Image credit: Hays Financial Consulting

 

Long gone?

With Kruchinin now out of the country, you may wonder how this order will apply.

He still must pay up, according to the FTC. And the ban still applies if he runs an overseas business with U.S. customers.

“If his business dealings outside the U.S. impact American consumers, they would be in violation of the court order,” said Mitchell Katz with the FTC. “This is a permanent court order and does not expire.”

What happens if he does not pay?

“We can seek a civil contempt order from the court if a defendant fails to comply with a Commission order, and in some cases, we can seek civil penalties by referring the case to the Department of Justice for prosecution,” said Katz.

“We also have cooperative law enforcement agreements with several countries that allow us to work jointly with them to bring actions and ensure compliance with Commission orders,” he said.

Money back?

Kruchinin abandoned his girlfriend, their child and their house in Reno, Nevada, documents showed.

There is a warrant for his arrest.

 

Google maps image of Kruchinin’s house in Reno, Nevada. Image credit: Google Maps

 

The receiver appointed to go through his business is selling off Kruchinin’s house and warehouse to pay off his debts and get help for customers.

If Kruchinin does not pay, there may or may not be money left over for the people who lost their phones and their money.

“Going through this experience made me strong and more aware to not take companies at their word,” said Narveson. “And before diving in, do research on company or people involved.”

 

See also these Archer News stories about Vadim Kruchinin’s multi-million dollar scheme:

Inside the takedown of a multi-million dollar used phone & laptop scheme

Used tech scheme owner could face $42 million fine

Return the money or face arrest, judge orders tech scheme owner”

Judge orders arrest warrant for head of used tech scheme

Used tech company owner may be planing to flee with gold bar stockpile, attorneys say

The hunt for money & phones after used tech scheme shutdown

 

Main image: Inside the Laptop & Desktop Repair warehouse in Sparks, Nevada. Image credit: Hays Financial Consulting

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