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The other side of the iPhone line: Homeless people left unpaid

Outside the Pasadena Apple store, some homeless people claim a businessman failed to pay them for standing in line on his behalf.

A homeless man who claims he wasn't paid the promised $20 for standing in line. Rich DeMuro/YouTube screenshot by Chris Matyszczyk/CNET

As long as there is still excitement about an iPhone, capitalism survives to crow another day.

So while many smiling faces and giddy torsos were witnessed around the world as the new iPhones went on sale Friday, some people were left grim.

At the Pasadena, Calif., Apple store, there was more than the average level of commotion.

A businessman had allegedly hired around 100 homeless people to stand in line on his behalf. Their remit was to get vouchers for two iPhones each. For this they say they were promised $20 for each phone they could secure. (Apple imposes a two-phone limit.)

However, as Rich DeMuro of KTLA-TV reports, some claim they didn't get their money.

One homeless man spoke to DeMuro on camera. He said he'd stood in line from 6 p.m. on Thursday.

He said the businessman had given the homeless people pizza, soda, and cigarettes. But he'd also promised them a total of $40.

Claiming there seemed to have been some miscommunication -- perhaps revolving around the idea that to obtain the phones, the homeless people would have had to put down some money -- the unnamed homeless man said he got no cash.

He described the experience in this way: "Have you ever been -- I don't know -- walking down the street and a pigeon pooped on your head or something?"

CBS Los Angeles reported that the homeless people had been approached in downtown L.A.

In talking to one of the businessmen allegedly involved in such a scheme, CBS was told that the phones are then resold -- often to foreign customers -- for as much as $1,000.

Some will believe that this is nothing more than free enterprise in action. As one homeless woman told CBS: "I was asked yesterday if I would be willing to sit in line for someone so they could get a phone. I said, 'Sure, I've got nothing else to do.'"

However, the Associated Press reported that fights broke out and two people were arrested.

CBS interviewed one businessman, who may have been the same man referred to in the KTLA-TV report. He wouldn't give his name, but admitted he was using the homeless people to get the vouchers and then he would resell the phones.

He said: "The phones are for me. I have a company that resells the phones for a higher profit."

He added: "It's not illegal. It's not against the law. I'm buying them at full retail price."

The Apple store staff seem to have identified his scheme and reportedly limited the number of phones he could have.

While some homeless people claim they kept their side of the bargain, the businessman needed a police escort to leave the area.