FBI Targets Online Auction Sites' Criminal Element

coondoggie writes "The FBI has made a number of big busts using the eBay and other online auction sites this year. Today comes news that it played a big role in the indictment of an Alabama man for wire fraud. Joseph Davidson, has been charged in U.S. District Court with wire fraud in connection with an eBay scheme in which he allegedly received approximately $77,000 for stolen goods sold on the auction site. "Online auction houses present an opportunity for a thief to turn a stolen item into cash. Thieves should know that law enforcement can surf sites too in investigating crime," the FBI said."

Comments

Well at least the numbers are going down

[soccer_Dude88888]

The article said crimes involving auctions are going down rapidly. That's a good sign.

Re:Well at least the numbers are going down

[ScrewMaster]

That's because this is America in the 21st century ... and nobody has any. Property, that is.

Baby Spice

[biocute]

What Took You So Long?

It all began....

[Snowtide]

With an FBI employee getting caught surfing ebay from their desk instead of working. They claimed to be looking for stolen property, the excuse caught on, and now it can be an assignment. :)

... the FBI thinks we don't already know this?

[tomhudson]

"Thieves should know that law enforcement can surf sites too in investigating crime," the FBI said.""

... like thieves live in a time warp and never heard the saying "On the internet, men are men, women are men, and children are FBI agents"?

Remember, this is YOUR tax dollars at work.

The FBI doesn't need to "surf eBay" to find crime - just investigate eBay, and all the complaints users have about auctions where they're out both the merchandise and the money, and feeBay doesn sh*t about it ...

Re:... the FBI thinks we don't already know this?

[Anonymous Coward]

just investigate eBay, and all the complaints users have about auctions where they're out both the merchandise and the money, and feeBay doesn sh*t about it ...

I don't know. I've found that eBay's subsidiary, PayPal, has been quite nice to me whenever users didn't end up shipping something. I've had this happen to me twice, and both times I got my money refunded.

Re:... the FBI thinks we don't already know this?

[tomhudson]

I don't have to RTFA - we had a case that made the local papers where a guy was bilked out of a $40,000 painting through eBay. They got the painting, never sent the money, so he's out both. feeBay did squat. The FBI did nothing, either. Why the f*ck do they have to have people "surfing the net looking for crime" when they've got people saying "hey, why the fuck don't you DO something about this - here's the proof, here's the people involved ..." and their response is "Its a civil, not criminal, matter. Take them to civil court." Fuck that.

Re:... the FBI thinks we don't already know this?

[Socguy]

True, True, but they should start, a lot of little people suffer much more relative damage to small time scams, and these people seem to operate with impunity. A lot of scammers try to take legitimate sellers as well. My Girlfriend likes to buy and sell online a lot and I can't tell you the number of scams and insincere people out there. Don't forget these scams are not limited to the big sites like Ebay, in fact they thrive on the small locals. The current most popular scam I'm seeing out there seems to be:

1. A potential buyer contacts a seller.
2. Potential buyer expresses interest in the item to be purchased but can only do an email money transfer.
3. Seller agrees but buyer then inexplicably decided to transfer a much larger sum than the item being purchased is worth and requests that the overage be given to a local 'associate'.

The way it works: The email transfer is actually from a dummy or illegitimate bank, or flawed in some way. Your bank receives the 'transfer' and dutifully displays the money in your account, however, in the banking world everything takes time and that money has not actually been verified as transfered from one bank to the other yet. If you carry out your end of the arrangement, you pass on the difference between the selling price and the overage you got to the 'associate', and that's the money you lose. In a week or so when your bank realizes that no money has actually arrived, they simply erase the transaction, wiping the entire deposit out of your account, (like a bad cheque!). However, any money you've given to the 'associate' was a legitimate transaction and it's gone to the scammers!

No, I haven't gotten taken by this, or any other scam, but I think it shows a level of ingenuity that could easily take someone a little more trusting. I had no idea how this could go bad until I looked it up, but I knew it smelled fishy at the time. As I'm sure everyone here knows, when something a little funny happens, even if you can't figure out right away what's going on, it's a scam! Wherever possible, meet the seller or buyer face to face, and pay CASH!

Re:... the FBI thinks we don't already know this?

[DrXym]

I think eBay is quite happy to put up with some crime on their network. After all, if you're defrauded they still make money. If you're sold counterfeit stuff they still make money. I expect they don't even care if some people dispute purchases since the refunds come out of frozen accounts that they keep the balance from.

Just search for "wholesale list" to see one very obvious and recurring scam that runs on eBay every day. Crime is so rife in categories (e.g. memory cards) that they should put prepend warnings and advice to every single auction advising customers how to look for forgeries. Vigilant customers would prevent the scammers from getting good ratings and ultimately from being profitable. Do eBay do this? No.

These a couple of examples. eBay is in a position to squash all kinds of scams but if they're doing anything it sure as hell isn't enough.

Re:... the FBI thinks we don't already know this?

[tomhudson]

Like this one http://cgi.ebay.ca/ws/eBayISAPI.dll?ViewItem&item= 230166616238&ssPageName=MERCOSI_VI_ROSI_PR4_PCN_BI X_Stores&refitem=230166612814&itemcount=4&refwidge tloc=closed_view_item&refwidgettype=osi_widget:

What appears to be 9 50-inch plasma TVs, with starting bids of under $20.00

The seller's name : bagaldouche ... bag - a - la - douche .... douchebag How much more obvious does it have to be?

As one angry purchaser put it:

"This is a scam i dont need to buy a list of where i can buy a tv
pierre_tousignant ( 1 )
28-Aug-07 09:48
BRAND NEW 50' PLASMA TELEVISION *WHOLESALE LIST* (#230164258373) "

Re:... the FBI thinks we don't already know this?

[nevillethedevil]

What? Maybe I am reading that wrong but did this guy send the painting before he got paid? If thats the case I really can't have too much sympathy for him.

Re:... the FBI thinks we don't already know this?

[tomhudson]

1. eBay confirmed the payment, and deposited the funds in his bank account. He shipped the painting
2. Guy claimed he never got it, despite proof it was delivered
3. eBay docked the guy's bank account the funds

A lot of people don't bother reading their agreement, and, depending on the account they have with eBay, they may have given them the right to do this (esp. for non-domestic accounts).

Re:... the FBI thinks we don't already know this?

[nevillethedevil]

I stand corrected

Re:... the FBI thinks we don't already know this?

[Jeruvy]

BS. Proof of delivery is all eBay cares about, prove that and they forget the whole issue. So if you really had proof of delivery, you wouldn't be out 40k. Besides if you really are out 40k why aren't you at the FBI office in your state right now? They can and will get the details from eBay and investigate.

Re:... the FBI thinks we don't already know this?

[tomhudson]

The person who was defrauded doesn't live in the US. No local EFF-BEE-EYE office.

All I saw was FBI and "big busts" in the summary

[Anonymous Coward]

Yeah, I know, offtopic, but I've been awake for 30 hours now working on this damn router problem makes my eyes go funny.

Comment removed

[account_deleted]

Comment removed based on user account deletion

So the FBI is going after PayPal?

[Anonymous Coward]

About damn time.

L@@K GOOD AUCTION

[Anonymous Coward]

A laptop was stolen with my state's taxpayer state taxpayer information on it recently. Look I found it on ebay: http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item =150156936378 yeah, no wonder that they are able to bust criminals using online auction sites.

Confused

[Anonymous Coward]

The article says the FBI are catching thieves and criminals. I don't think I've actually seen that before. Something must be wrong. Shouldn't they be providing the MPAA/RIAA with evidence on 5 year olds listening to barney themesongs.

Chump Change Compared

[Anonymous Coward]

to the criminal elements in The White House.

Patriotically From An Undisclosed, Secure Bar In Washington, D.C.,
Kilgore Trout, M.D.

Fence Feedback

[yintercept]

This article was about catching people selling stolen merchandise and not about fraud on ebay.

I would think that fences would have good feedback ratings. It is not like they are trying to cheat the ebay buyer. A fence would want to get the stolen merchandise out of their garage and into the hands of the buyers as quickly and with as little fuss as possible. Since the entire sale is profit, the fence would make enough from the sale to expedite the whole process, package the goods well and communicate with the buyer.

Someone who has stolen merchandise to sell would probably want to sell it with as little fuss and notice as possible. So they would have a good feedback. The complaints would all be about people committing fraud.

It would be interesting to study the different feedback rates for different types of criminal.

Re:Fence Feedback

[tomhudson]

The person who bought the painting then resold it. 1 guess how they resold it.

Re:Fence Feedback

[Elbowgeek]

It has to be remembered that most criminals are criminals because they ain't too bright. And they often ain't too nice to begin with, and it's this sort of stupidity and arrogance which will sink the stupidest of the criminal element. Just think, if these guys had a real brain, they'd not be criminals for the most part.

Cheers

Re:Fence Feedback

[Antique Geekmeister]

I suspect not. Frauds, and fences, are often one-shot operations. Set up the account with stolen credit card information, collect some cash, and get out.Therefore the sort of followup and attention to details of pleasing the customer are unlikely to find there.

Although, come to think of it, a money laundering operation with multiple accounts could easily use a little pyramid scheme of vendor approval to boost their ratings.

"Thieves should know...."

[WombatDeath]

"Thieves should know that law enforcement can surf sites too in investigating crime," the FBI said.

I don't see why. Assuming that things are going to be stolen regardless, it's surely better to let (stupid) criminals believe that they have a secure way to dispose of their loot. It sounds unlikely that there are now loads of thieves thinking "Shit, I was going to nick a load of stuff to sell on eBay, but now I think I'll mow the lawn instead".

Granted, I'm not working in law enforcement and have no idea what I'm talking about, but I've been hanging around here long enough to know that that's not considered a drawback.

Re:"Thieves should know...."

[physicsphairy]

Well, I think there are actually a lot of arguments both ways.

The downside to having cons sell their goods on the internet is that they cut out the middle man. If a thousand thieves use the same fence, the FBI has a lot of recourses it can use to catch all or most of them just by locating the fence. If a thousand thieves use the internet to unload their wares, then now the FBI must deal with a thousand different 'fences' instead of just one.

It's also easier to conceal transactions. I mean, imagine the boon for dealers if the fed's narcotics agencies couldn't sniffout drugs in the parcel service.

Of course, the listings occur on the internet, which is the intrinsic downside for the thieves, but there's still no way to know that something's stolen unless it's being looked for and serial numbers, etc., have not been effaced. Most local investigative practices (like asking local people questions) no longer works and must be replaced by statistical analyses, identifying strange bank transactions, apparent reporting irregularities to the IRS, etc.

Basically, with ebay, you're definitely going to snagged if you steel a semi and try to sell off its full cago, but a dirty employee who skims a few things off every shipment and sells them might be pretty much immune from any problems.

That's just some speculation... maybe the FBI just thought it would be better to get some publicity for the agency than fight an effective but clandestine campaign against theft. I do think it is probably a complex issue, though, and not immediately evident that giving away their involvement is a bad thing.

Re:"Thieves should know...."

[Anonymous Coward]

RTOA, there's more to it than just the threat of a crime investigation. From the FBI's web site, the US Attorney also states, "To those contemplating internet fraud, be warned that there is a possibility of twenty years prison for committing wire fraud."

Of course without some credible level of deterrence, it's easy to conclude the law will continue to be broken. Internet crime is out of control. And as bureaucracies by nature are slow to adapt, our laws remain at least 30 years behind the curve of technology. Leaving our law enforcement agencies ill-equipped, not to mention exceedingly vulnerable, in catching the modern day criminal. Both our law enforcement agents and would-be criminals deserve more up-to-date laws!

Re:"Thieves should know...."

[guruevi]

It's the same as saying "Thieves should know that law enforcement can hang around in pawn shops or set up sting operations with goods sold in the local paper"

There is nothing new about it, only the medium changes. That law enforcements can surf sites is nothing new, it's just fluff in their news conference to say: "look, we're doing something good with your tax dollars" and maybe it might let the average Fox or CNN news viewer feel more safe about his precious possessions.

One Day Loophole

[UncleWilly]

One day auction. Put it up Saturday afternoon. Sold by Sunday afternoon. Delete pics from non-eBay website.

Everyone knows FBIers watch sports all weekend.

But there's more shit problems with eBay

[solar_blitz]

When will a fraud task force begin looking at all the scams found on online auction sites? Scammers make more money than thieves, don't they?

not news

[StaticShock]

As far as I know, this technique has long been in use. ~4 years ago, some school students stole a bunch of large plasma tv's from a couple of UConn classrooms and were caught by local authorities shortly after because the TVs were found for sale on ebay.

Re:not news

[L4m3rthanyou]

The same thing happened at my high school... a student stole ten Mac G5s (back when these were still pretty new) from the digital animation classroom, but was busted when a teacher found them up for sale on fleabay. He was over 18, too, so they threw the book at him.

The "universal fence" factor is yet another reason I hate fleabay... not to mention the scams, and all the other BS that goes on that eBay won't do anything about.

Duh...!

[jxliv7]

"...Thieves should know that law enforcement can surf sites too in investigating crime," the FBI said."

Another great insight into the stupid criminal mind.

The $77k is worth noting

[doggod]

And the best of the fraudsters do note it. They know what I had to find out the hard way, that the US Attorney's office will not prosecute anything less than about $25,000 (the exact amount varies from district to district).

Several years ago, I got stuck with some bogus cashier's checks. I think the amount was around $10k. I went to the FBI, I went to the Secret Service, I went to the Postal Inspector. They all work for the same Federal Prosecutor, and they all broke the same news, that they couldn't afford to waste their time investigating because even if they brought the culprit in he would never be charged. "The AG's office has to allocate its time" was how it was explained to me.

Apparently the Feds are too busy prosecuting sick and dying invalids for smoking state-legal marijuana after they're brought in by DEA thugs http://www.huffingtonpost.com/reena-szczenpanski/m ultiagency-drug-task-fo_b_62401.html to be bothered with protecting the property stolen from nobodies like me.

So, as I say, I'm pretty sure the best of the on-line scammers are onto this, and they carefully craft their hits to be less than, say, $20,000. It is, literally, a "get-out-of-jail-free" card!

Re:The $77k is worth noting

[Dachannien]

The US DOJ is not the only game in town, though. In many cases, a violation of federal law will also involve a violation of state law, so if the Feds won't handle a case, check to see whether the state or county authorities are interested.

where's Ebay's liability

[Pugzilla]

But the total dollar losses reported were up in 2006, totaling $198 million for the year.

if as is the case with most property crime, they are barely scratching the surface when it comes to actual $ amount in "fenced" merchandise online and all for those stolen goods Ebay is still getting there money.

Nothing to see... move along...

[Anonymous Coward]

This has nothing to do with PayPal going down for the weekend -- no government spyware installed there. The FBI has not begun an automatic monitoring of PayPal accounts, much as it does not monitor your bank for smurfing and other unusual account activity. Resume your normal activities, and go about your business.

Proof Of Ownership

[nurb432]

Not getting into the case in the story as there may have been ample proof, but how does the FBI decide if you are selling stolen items?

Some people have lots of stuff to sell, and dont have any proof of ownership ( i know i personally couldnt prove i bought 2/3 of what i have.. ). Or is it by what the item is? Again, lots of people have lots of stuff. How can you tell just from what a person is selling that its stolen?

Im all for catching criminals, but this sounds ripe for abuse: " we see you are selling something we dont approve of this week, come downtown with us to answer a few quesions', and also use that as probable cause to search/impound your home.

Re:Proof Of Ownership

[DragonTHC]

it's not about proof of ownership. These snares are for people they already suspect of stealing from their local stores.
Say, the guy works at walmart. the store suspects he's stealing stuff but can't prove it. The FBI comes in and taps his ebay account.
They nail him for wire fraud for selling stolen items on ebay. They know he didn't buy 24 9" color tv/weather radios because the store is cooperating with the FBI also.

I agree this could be abused, however, the FBI doesn't really care about you selling your power ranger collection.

Re:Proof Of Ownership

[lunartik]

how does the FBI decide if you are selling stolen items?

I worked for a large US manufacturer, and we noticed some of our tooling was going missing and seemed to be ending up on eBay. We marked similar tooling in the area where it was disappearing. Showed up on eBay. No problems proving it.

Re:Proof Of Ownership

[Renraku]

They'll most likely be targeting phished accounts used to fraud people into sending them money..then people that set up accounts specificially for fraud..and they'll probably be monitoring for large amounts of stolen goods, too.

Re:Proof Of Ownership

[oolleq]

In one recent case Safeway knew that they were losing high priced razor blades off their shelves that weren't being recorded as being sold by their cash registers. That total was about $70 grand as well. One of their cashiers was selling the high end razor blades to an accomplice but scanning a low priced razor blade package. The advertisement on eBay said the item was unopened, and that was good enough for quite a few people. Safeway noticed that their products were being sold below cost and requested help from eBay, and eBay refused. eBay will not assist in ORC cases unless requested to do so by law enforcement agencies. Major chain US retailers pooled their data and estimated that they lost 30 billion dollars in 2006. That's people stealing power tools from Home Depot to health and beauty products in Safeway. This is now called Organized Retail Crime, and the FBI is getting interested. Of course stores have to protect themselves. Last weekend three guys in a stolen van drove up to a local Safeway, walked in with a shopping cart and filled it with over $500 of steaks, chicken breasts and crab legs then ran out the door. The LPO, (Loss Prevention Officer) was well trained, and knew that three ORC guys when confronted will kick the shit out of an LPO. So he wisely stayed inside the store and watched two of the thieves load up the van while the third just watched. But he had the stolen van keys dangling from his hand. The LPO (a friend of mine, I know quite a few of the security officers working for his company) called 911, then ran out and took the keys out of the drivers hand and ran back inside the store. When the two loaders saw their driver running back inside the store they knew the job was blown, and they ran off down the street. The lone thief who re-entered the store quickly saw the odds had turned against him and also ran off. All three were apprehended within minutes and the van, the stolen meat, and the proceeds from two previous robberies were recovered.

READ IT!!

[El Long]

He makes it 100% clear that he is selling a list of wholesalers:

PLEASE READ ENTIRE AUCTION!

Great deals for great products at wholesale to resell on Ebay. Auction is for a wholesale list. Are you looking for top of the line flat panel televisions at dirt cheap prices? Ever wonder where the eBay power sellers get their products?

Ready to be in business for yourself?!!! With this list you can buy NEW factory sealed electronics to resell on Ebay to make big money. This is where the sellers get items to sell, etc. ... AT UNBELEIVABLE PRICES. START MAKING MONEY TODAY!!!! YOU WILL RECEIVE AN EMAIL OF THE LIST AFTER YOUR PAYMENT HAS BEEN RECEIVED. ALL SALES ARE FINAL! YOU ARE PURCHASING A LIST, NOT THE ITEM PICTURED

If you bid on this and didn't read the sodding auction then it's your OWN DAMN FAULT! This in no way counts as fraud.

Re:READ IT!!

[tomhudson]

He should be showing a picture of the list. He is in no shape or matter selling the item that is pictured. This is misleading.

Like I said - look at his name - "bagaladouche" - douche bag. He's thumbing his nose at everyone, making it clear that he's out to scam people, and hoping they will be too embarrassed to complain.

He's like the guy who sold "breast developers" and would mail people a picture of a hand groping a breast, or cockroack killers - and send them 2 bricks, along with instructions:

1. place brick on table
2. place cockroach on brick
3. smach second brick onto first brick

Its fraud.

Re:READ IT!!

[El Long]

That is saying one thing and delivering another. He spells out EXACTLY what he is selling, It's even in the auction title. Selling two bricks labelled as a roach killer is one thing but advertising a list of wholesalers as a list of wholesalers is legit.

Also, as we should know here, one's screen name is not necessarily a guide to one's character. Who's to say he didn't choose that name on a whim because he thinks it's funny?

As always, caveat emptor, buyer beware. If you think you're gonna get 50 big screen TVs for $10 then you are foolish and would be well advised to READ THE LISTING PROPERLY. I see these lists all the time for phones. If you have the money then you can get the list, buy phones in bulk and then re-sell them. Seems fair. Of course you could probably just use Google to find your wholesalers but the guy is providing a service. I have no sympathy for people who buy stuff without checking what it actually IS.

Re:READ IT!!

[DrXym]

If you bid on this and didn't read the sodding auction then it's your OWN DAMN FAULT! This in no way counts as fraud.

The adverts are deliberately misleading because there ARE people who won't realise what they're bidding on until it's too late. It's a scam by any reasonable meaning of the word. Whether its "legal" or not is irrelevant.

Re:READ IT!!

[DrXym]

Furthermore, there is an extremely easy way for eBay to stamp on this kind of thing - create a wholesale list category, and set a bunch of (enforced) guidelines for posting there, such as no graphics, no product names in the title and so on. Let's see how long the scam would last then.

Of course that would assume eBay want to shut the scam down. That they don't do any of these things suggests they're happy to let people get conned as long as they get their rake.

Re:READ IT!!

[Jeruvy]

Agreed. If you get sucked into such a auction, then you "deserve" to lose money. Afterwards, with any luck you'll learn not to repeat this again. But who's kidding who.

Grammarstapo

[Arthur Grumbine]

I dont know whether to turn:
The FBI has made a number of big busts using the eBay and other online auction sites this year
into:
...a number of big busts of criminals using the eBay website and other...
or:
...a number of big busts using the eBay website and other...
or maybe:
...a number of big busts of criminals using eBay and other...
or simply:
...a number of big busts using eBay and other...

So...many...possibilities...can't choose...AAAUUUUGGHH-
*head explodes from judgmental frustrastion*

Re:Grammarstapo

[sg_oneill]

The last one is most appropriate grammar for this internets

FBI took paypal computers?

[jedaustin]

With the problem with paypal subscriptions and other payment issues that started a few days ago...
I wonder if the reason for the problem is that the FBI has seized computers?
Scary thought.

Another perspective...

[courcoul]

We've been hashing out how Joe McThief is pawning off the stuff he stole using eBay's gullible bidders. How about money laundering? Here's a quick example: USB flash drives. Small or large, we all have one, right? Nowadays, 1GB are going for around $15, 2GB around $25, 4GB around $40, 8GB around $55, 16GB around $75, a few 32GB for $100: there's a linear progression of the prices as the devices double in size. However, suddenly some "shop" starts offering 64GB drives for $5,000!!! FIVE THOUSAND DOLLARS. Heck, you can buy a high-end portable with 180GB of internal HD for that kind of money! Try and convince me that this is not some sort of money laundering scheme...

Re:Another perspective...

[CajunArson]

Because anybody who's seen a money laundering scheme would immediately know this is not one:
    1. Supply and demand, you took a linear price relationship for a small sampling of products and extended it into infinity. This is known as the "rule of small numbers" error. Right now 64Gb flash drives are extremely expensive due to the small number produced and the fact that flash chips are not yet dense enough to easily support 64Gb.

    2. A money laundering scheme would probably be trying to sell items for LESS than (or maybe about the same as) comparable goods. Firstly, the proceeds for stolen goods are 100% profit, and secondly any fence worth his salt is not going to try to attract too much attention. He could sell it cheap, but won't go for $1 or anything ridiculous, and if he were to try to sell the goods for an insanely high price, nobody would buy them... and no money would be laundered... and the entire point of the scheme would be defeated.

Re:Another perspective...

[courcoul]

Missed the point entirely.

The idea is to carry out a commercial transaction that looks legit so you (the seller) can say "I got this income from selling that" or you (the buyer) "I spent that amount buying this", notwithstanding that a hammer was bought for $4,000 (oops, wrong example, that's the military, sorry ;) ).

Didn't you hear about the Chinese-turned-Mexican that's giving the Mexican Government major headaches and how the FBI nabbed him after he requested political asylum in the USA? Seems the Feds caught wind that the drug cartels were giving the man big wads of money to go to Las Vegas and LOSE in the casinos. Of course, not just any casino...