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FBI Targets Online Auction Sites' Criminal Element 57

Posted by samzenpus
from the arrest-me-now-button dept.
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."
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FBI Targets Online Auction Sites' Criminal Element

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  • What Took You So Long?
  • by Snowtide (989191) on Sunday September 02, 2007 @11:46AM (#20441919)
    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. :)
  • "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 ...

    • RTFA, jesus christ. They arn't investigating Joe Blow who stole a $50 item from Susie Homemaker. They are investigating people selling very expensive stolen items, like artwork, trade secrets, diamonds, etc. All it's saying is that just because they're selling the stolen goods on ebay doesn't mean they won't see it.
      • Re: (Score:3, Informative)

        by tomhudson (43916)

        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. Tak

        • 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.
          • by tomhudson (43916)

            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).

            • I stand corrected
            • by Jeruvy (1045694) *
              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.
      • by Socguy (933973) on Sunday September 02, 2007 @12:42PM (#20442573)
        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!
    • Fence Feedback (Score:5, Interesting)

      by yintercept (517362) on Sunday September 02, 2007 @12:07PM (#20442177) Homepage Journal
      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.
      • by tomhudson (43916)
        The person who bought the painting then resold it. 1 guess how they resold it.
      • Re: (Score:2, Insightful)

        by Elbowgeek (633324)
        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
      • 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.
    • Re: (Score:3, Insightful)

      by DrXym (126579)
      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 wa

      • by tomhudson (43916)

        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: [cgi.ebay.ca]

        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: [feedback.ebay.ca]

        "This is a scam i dont need to buy a list of

        • 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,

          • by tomhudson (43916)

            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. plac
            • by El Long (863542)
              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 s

            • by DrXym (126579)
              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.

          • by DrXym (126579)
            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.

            • by Jeruvy (1045694) *
              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.
  • by 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.
  • by WombatDeath (681651) on Sunday September 02, 2007 @12:09PM (#20442195)
    "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.
    • 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 bo
    • by guruevi (827432)
      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.
  • 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?
  • 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.
    • 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.
  • "...Thieves should know that law enforcement can surf sites too in investigating crime," the FBI said."

    Another great insight into the stupid criminal mind.
  • by doggod (1081287) on Sunday September 02, 2007 @12:26PM (#20442397) Journal
    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 [huffingtonpost.com] 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: (Score:3, Informative)

      by Dachannien (617929)
      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.

  • 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.
  • 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 sellin
    • Re: (Score:3, Insightful)

      by DragonTHC (208439)
      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 yo
    • Re: (Score:3, Interesting)

      by lunartik (94926)

      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.

      • by oolleq (742995)
        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
    • by Renraku (518261)
      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.
  • 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.
  • by courcoul (801052) on Sunday September 02, 2007 @06:01PM (#20445691)
    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...
    • 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 try
      • by courcoul (801052)
        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 c

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