Yesterday’s Crimes: The TV Huckster Who Defrauded Apple

There was a time in this town when a TV pitchman with a cramped stereo store on Mission Street could bilk a Silicon Valley tech giant.

Matthew’s TV and Stereo on the gentle incline at “Top of the Hill, Daly City” didn’t have a whole lot of floor space, but it was STILL kind of a big deal. The Monkees signed autographs there before playing a sold-out show at the Cow Palace in the 1960s, and Michael Dorn from Star Trek: The Next Generation pushed 8-track players there in the 1970s when he went to San Francisco State.

But owner Steven Matthew David achieved his highest level of local fame in the 1980s when he bombarded the local airwaves with TV ads where he offered free bikes with 25” Zenith TVs and Sanyo car stereo systems. “Get a bike!” David exclaimed as he hovered over his store’s stacked inventory via green screen, as triumphal stock music set an upbeat tone.

Matthew’s paid $90 to $120 for the 15- speeds. The cost was all passed back to the customer, but David maintained that no one seemed to mind.

“Over the years, we’ve moved 150,000 bikes,” David boasted to the Examiner in 1992. “Three percent of the people in the Bay Area are riding around on bikes they bought from us.”

But, all that sweet coin from moving Fisher cassette decks wasn’t enough for Steven Matthew. He wanted to get in on that original tech boom coming out of Cupertino at the time, so he hatched an ingenious — and illegal — scheme that actually bit into Steve Jobs’ bottom line.

In March 1984, David conspired with John Lynch, an employee of the Archdiocese of San Francisco, to purchase 2,700 Apple computers using the institution’s educational discount. The computers were supposed to go to Catholic schools, but only 450 Macs made it to classrooms while David moved the rest out of his Computer Connection store in San Francisco at full price.

According to the Examiner, David also billed Apple $100 per computer in service fees, claiming his company installed the contraband Macs at the schools. Apple estimated it lost more than $700,000 from the scam.  

“We’re painfully aware of it and are trying to resolve it,” Rev. Miles Riley, a spokesman for the archdiocese, told the Chronicle after learning of the scam. “We want to pay back what is owed and make amends.”

David and Lynch were indicted on fraud charges by the San Francisco District Attorney’s office on May 15, 1986. While David was still pleading not guilty, Lynch copped to the rip-off and was sentenced to three years probation, 500 hours of community service and a $500 fine. By August, David pleaded no contest and was required to return more than $860,000 in cash and computers to Apple, a now $1 trillion company that has avoided paying billions in U.S. taxes by storing its cash offshore.

 

The Apple scam wasn’t the first time that David had a brush with the law over his business practices. In March 1974, the San Mateo and San Francisco county district attorneys charged David and Bay Area disc jockey Tom Campbell for using what the Examiner called “bait and switch” tactics. David and Campbell advertised impossibly low prices on products that were conveniently out of stock as a way of luring customers into the store. David paid an out-of-court settlement of $80,000.

After paying back Apple in 1986, David closed down his Computer Connection store, but Matthew’s kept on going until November 1992 when now-defunct national chains like Circuit City and the Good Guys drove him out of business.

“I’m tired of doing this,” David said as customers mobbed his store one last time. “I’ve lost interest. What am I going to feel when I close the door here for the last time? Nothing but relief.”

In 2003, David still owned the building at 6400 Mission St. that once housed his retail empire, but the storefront had become what Daly City officials deemed “an eyesore.” David agreed to clean the place up in August 2003.

“I’m indeed embarrassed and ashamed to be down here,” David said, appearing before Daly City officials. “I agree with the staff that the building looks terrible and I apologize.”

Today the building is home to a One Dollar Only store — where, it should be noted, several items go for more than a buck.

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