Tesla had a loophole in its online ordering system, one so huge you could essentially get a free car from them. A man in Vermont took advantage of that loophole and managed to get half a million dollars in Tesla’s delivered without paying a dime according to Marketwatch.
According to federal prosecutors, 34 year old Michael Gonzalez managed to figure out that Tesla’s online ordering system could allow you to place an order for a car without paying anything. The key to exploiting the loophole was so simple it’s dumb.
He entered bank details into Tesla’s online payment portal that were attached to accounts that had little or no money in them.
The scheme started way back in 2018 and seemed to be a quick way to make a buck by flipping the cars. That September, Gonzalez placed an online order for a $58,000 Model 3 with a $2,500 deposit. Only when the car was set to be delivered did he provide info for the accounts with zero balances. By December he had already sold the car to a local dealer for $42,000.
Tesla, for its part in this, was just as dumb. Authorities say that Tesla actually delivered the cars to Gonzalez without even waiting for the transactions to process; the company didn’t receive notice that the accounts Gonzalez used had no funds in them until days later. To make matters worse, Tesla provided Gonzalez with certificates of ownership which not only allowed him to legally register and drive the cars, but also sell them.
His scheme continued on into 2019 when he managed to get four more Teslas.
Over the following year, prosecutors said Gonzalez repeated the scheme four more times, each time for a Model X worth around $150,000. In two cases, he entered the name of a girlfriend or ex-girlfriend as the buyer instead of his own, according to court papers. He was able to sell two of the cars on Craigslist and eBay for $108,000 and $97,000, respectively.
Like most criminals, Gonzalez was an idiot and got too greedy. After failing to receive a certificate of ownership for one of the Teslas, he drove it onto a frozen lake and set it on fire. He tried to file a claim with insurance, but the insurance company though the whole thing was suspicious and asked him to come in for an in-person interview. He never showed up. Authorities were tipped off not long after.
Gonzalez was arrested on a separate charge—he lied on an application for a federal firearms license in which he stated he wasn’t facing any other criminal charges. After pleading guilty “to five counts of possessing and disposing of stolen vehicles”, he was sentenced to four years in prison. He also agreed to pay Tesla $493,000 in restitution and to forfeit $231,900 he made off selling the Teslas.