The Russian conman made millions from popularity of iPad 2 and iPhone 4 by promising cheap deals. (Image credit CNet)

Russian police in Moscow have arrested a 44-year-old man suspected of organizing the financial pyramid selling iPhone and iPad, said Interior Ministry official on wednesday.

According to the law enforcement officials, the man started his activities in August 2011. First, he spread the information to his friends that he has some connections with Customs officials, and has the opportunity to purchase iPhone and iPad at a price significantly below market.

Then he started taking orders for Apple’s iPhone 4S at a price of 15 thousand Russian rubles i.e. about $450. Condition of the deal was 100% in advance.

To win trust of customers, initially he bought the gagdets from market at a higher price and sold cheapely paying out of his own pocket. Once he had gained the popularity, , according to police, the customers started flocking to the speculator.

Within three months he collected tens of millions of rubles. Only one customer paid him five million rubles (150,000 $) as advance payment for iPhone and iPad. The Muscovite “entrepreneur” even started offering his wealthy clients to launch a company, buy property and build a showroom. Some even expressed willingness to invest in his venture.

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After that, the man in December 2011 stopped answering customers’s calls, and in May, police started receiving compalints.

Police arrested the alleged fraudster in his apartment and during searches they got their hands on bills and receipts.

The budding Russian entrepreneur in his statement has confessed to his involvement in 10 crimes totalling a fraud of 20 million rubles (600000 $).

This is just one of the instances in which speculators are making money out of the popularity of Apple’s gadgets across the world, and we may expect many more cases unearthed in the coming days.

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