A Coatesville man who used a software glitch to defraud eBay out of nearly $320,000 was sentenced Friday to a day in prison and four months of house arrest after he paid back the retailer by selling the items he stole.
Chad Broudy, 25, pleaded guilty last year to two counts of wire fraud after he exploited a glitch that let him over-redeem eBay's gift cards again and again without the cards getting charged. For 2½ months, Broudy went on an epic shopping spree, paying virtually nothing for more than 3,000 items valued at roughly $320,000, according to federal prosecutors.
"He discovered this [glitch], but when he discovered it, he had some choices," Glenn said. "He could have said, "OK, I better not do that. That's wrong.' Or he could have said 'OK, I better let eBay know and tell them that this is a problem.' But he did neither of those. He then proceeded to exploit it, and he did it again and again and again and again. He did it 1,100 times."
The eBay glitch would fail to deduct monetary value from a gift card when a product was purchased with both the gift card and another payment method, prosecutors said. When buying items, Broudy would put nearly all the product's cost on the gift card, which would not get charged, and only a nominal amount on the other payment method, prosecutors said. That allowed him to buy items at virtually no cost.
Broudy bought Macs, iPhones, speakers, small gold bars, and even cash ($100 bills), court records show. He obtained a cotton candy maker, a cordless vacuum cleaner, a brass eagle statue, and a Star Trek sushi set. He sold much of his bounty, converting Xbox controllers, wine glasses, and smart thermostats into cash.
The software bug existed from fall 2016 to January 2017, court records show. Broudy was responsible for roughly a third of the loss that eBay suffered from the glitch, Glenn said during Friday's hearing.
