iPhone Fraudster Pleads Guilty

A Chatsworth man faces more than 8 years in federal prison after pleading guilty to fraud charges connected with his Glendale ride-sharing business. Kevin Galstian will be sentenced by District Judge Barry Ted Moskowitz on Jan. 11 as part of a plea deal reached with prosecutors in federal court in San Diego, according to the U.S. Attorney’s office in Los Angeles. Galstian, 37, admitted Wednesday to a single count of wire fraud for making more than $13 million by selling 30,000 iPhones fraudulently obtained from Verizon Wireless at discounted prices. At the time of the offense Galstian was on pre-trial release in an unrelated bank fraud case to which he already pleaded guilty. The 100-month sentence that Galstian agreed to with prosecutors combines sentences from both cases, the U.S. Attorney’s office said. Galstian used his company, Toro Ride in Glendale, to buy iPhones from Verizon for 99 cents each, claiming that drivers in the ride-sharing service would use them. He then turned around and sold most of the phones to companies engaged in the international re-sale of consumer electronics. Thousands of the iPhones that Verizon shipped to Toro Ride were never used on its network and instead were activated in countries such as Vietnam, Iraq, China and Saudi Arabia, according to the U.S. Attorney’s office. The plea agreement orders Galstian to pay $17 million in restitution to Verizon. Authorities seized $200,000 from Galstian in bank accounts, vehicles and properties in Northridge, Sherman Oaks, Tujunga and Las Vegas.