Woodhams used Visa-branded gift cards to handle the $1 pre-authorization that Apple runs on credit cards submitted as part of the replacement process, and had the iPod Shuffles shipped to a box at a local UPS store. Although Apple later tried to charge the cards for the cost of the iPod when it didn't receive a broken device -- also part of the swap process -- the charges were rejected because the gift cards had already been exhausted.

Last June, Apple filed a lawsuit against Woodhams that said he had "fraudulently manipulated the Replacement Program" and asked the court to bar him from continuing his practice. Apple claimed then that it had been ripped off to the tune of $75,000. The case is now on hold as the federal criminal case moves forward.

Federal prosecutors have asked U.S. District Court Judge Robert Bell to let them seize real estate and personal property -- including a 2004 Audi and a 2006 drag racer -- as well as more than $571,000 in cash belonging to Woodhams, all alleged to be proceeds from his scam.