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Man faces four years behind bars after tricking Tesla into handing him five cars he never paid for

Christiaan Hetzner
By
Christiaan Hetzner
Christiaan Hetzner
Senior Reporter
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Christiaan Hetzner
By
Christiaan Hetzner
Christiaan Hetzner
Senior Reporter
Down Arrow Button Icon
October 13, 2023, 9:26 AM ET
Vermont man headed for prison over Tesla fraud
A man from Shelburne, Vt., pleaded guilty to multiple felony counts for scamming Tesla and now faces years in prison. Getty Images
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Four years ago Michael Gonzalez drove the Model X Tesla had delivered to him onto the frozen surface of Vermont’s Lake Champlain, climbed out of the vehicle, set it ablaze, and walked away.

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What the 34-year-old likely didn’t realize at the time, was that his fifth attempt to steal from Elon Musk would also mark his last. 

In 2018, Gonzalez discovered a vulnerability in Tesla’s controlling that allowed him to receive delivery and gain title to ownership of the vehicle, without paying more than the initial $2,500 deposit.

All he needed to do was provide details of a bank account that either lacked sufficient funds or were entirely fictitious. 

Afterward the Shelburne, Vt., resident would resell the nearly new vehicle in the private used-car market in order to pocket the difference. 

The discovery of what Gonzalez believed was a license to print money led him to repeat the swindle again and again in different states—effectively stealing five luxury vehicles worth approximately $560,000 in total. 

Now Gonzalez will likely spend the next four years of his life behind bars after a guilty plea saw a U.S. district court judge sentence him for multiple interstate felonies.

At the time he was scamming Musk, Tesla was still trying to prove short-sellers wrong by demonstrating its business model could scale. Back then the challenger brand struggled to fetch a market cap of around $50 billion, a far cry from today. 

Key to turning it into the $800 billion–plus stock exchange behemoth were financial results that showed volumes continually surging from one quarter to the next, with Gonzalez potentially capitalizing on that push.

How Gonzalez got caught

According to Department of Justice officials, Gonzalez grossed nearly $232,000 by selling three of the five motors to used-car buyers. Had he quit while he was ahead rather than tempt fate, he may very well have gotten away with it. 

On Gonzalez’s fifth try to cheat Tesla, Musk’s company still opted to deliver the newly built Model X.

Yet for reasons unclear, since Tesla could not be reached for comment, this time the company either could not—or would not—transfer the title’s certificate, which manufacturers often obtain from a Department of Motor Vehicles on behalf of new owners.

Without the legal documentation needed to flip the vehicle, Gonzalez struck on the idea of committing arson in hopes of collecting damages instead. 

When the insurance company required him to appear for examination, the jig was up. 

The U.S. Attorney’s Office for the District of Vermont said on Thursday that Gonzalez must now provide $493,000 in restitution to Tesla along with a fine of $231,900 paid to the U.S. government.

Tesla reports third-quarter earnings on Wednesday. New finance chief Vaibhav Taneja will likely face a slew of questions over deep price cuts after its share of the U.S. EV market dipped nearly 10 percentage points.

About the Author
Christiaan Hetzner
By Christiaan HetznerSenior Reporter
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Christiaan Hetzner is a former writer for Fortune, where he covered Europe’s changing business landscape.

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