Alabama v. White

On April 27, 1999, David M. White was convicted on charges of theft of property in the first degree by deception. The defendant offered items for sale via Internet auctions using various fictitious names and addresses. He accepted payment from hundreds of consumers all over the world and failed to provide the merchandise. The defendant received five years probation and was ordered to pay full restitution.

Contacts: Rob Bethel, National Public Information Officer, United States Postal Inspection Service, 202/268-5283. David Emery, Geneva County District Attorney, 334/684-3697 or 334/774-9500.

USPS v. Various Fictitious Names at various addresses in Anchor Point, Alaska On November 10, 1999, an order to withhold mail, under the provisions of 39 USC 3003 and/or 3004, was issued by the USPS Judicial Officer and resulted in mail, most of which contained payment checks, being returned to the sender(s). The Order resulted from an investigation that determined that the respondents were running a scam that involved offering goods via an Internet auction web site and failing to deliver the goods. 

This case was investigated by the United States Postal Inspection Service, Northwest Division.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

Arizona v. Simek

On February 19, 1999, Arizona Attorney General Janet Napolitano announced that her office had obtained an Assurance of Discontinuance from Anthony Simek, who allegedly offered computers for sale over the Internet but failed to deliver. Simek allegedly used an Internet auction web site to advertise the computers, and then made arrangements to ship the computers to a buyer after receiving a $1,500 payment. However, the consumer never received the computer. Under the terms of the Assurance, Simek will furnish written statements of material terms of sale to future buyers, including a complete description of the merchandise, price, terms and delivery arrangements. He also is required to keep records of shipment and payment as well as all correspondence with buyers. Simek also refunded the buyer.s money. 

Contact: Pati Urias, Public Information Officer, 602/542-8017.

U.S. v. Guest

On July 14, 1999, Robert J. Guest pleaded guilty in United States District Court in Los Angeles to charges of bilking people who bid on various items offered at auction on the

eBay Internet auction web site, taking approximately $37,000 from consumers and never delivering the purchased goods. Guest pleaded guilty to one count of mail fraud as well as a second count of illegally obtaining a credit card. On November 2, 1999, Guest was sentenced to 14 months in federal prison.

This case was investigated by the County of Orange Boiler Room Apprehension Task Force, which includes the FBI, the Orange County Sheriff.s Office and the United States Postal Inspection Service. This case was prosecuted by the Office of the United States Attorney for the Central District of California.

Contact: Thom Mrozek, Public Affairs Officer, Office of the United States Attorney,

Central District of California, 213/894-6947.

People of the State of California v. Alto Corp. et. al.

On May 27, 1999, the District Attorney of Ventura County, California obtained a final judgment and permanent injunction against Alto Corporation and Auction Sales, Inc. The companies operated a web site that conducted sales and auctions for computer equipment and other merchandise and the companies operated as an Internet service provider. According to the Complaint, the defendants offered goods for sale, accepted payment and, among other things, failed to deliver the merchandise in a timely manner, failed to provide refunds to customers who received defective merchandise, and failed to provide refunds to customers who returned defective merchandise. The final judgment required the defendants to pay a civil penalty of $28,500, and requires that the defendants ship merchandise within 30 days and follow other legal requirements regarding auctions and Internet sales.

This case was investigated and prosecuted by the office of the Ventura County District Attorney.

Contact: Michael Schwartz, Deputy District Attorney, Ventura County,

805/289-1997.

People of the State of California v. You

408/792-2742.

USPS v. Various Fictitious Names at PO Box 22754,

Sacramento, CA 95822-0754

This case was investigated by the United States Postal Inspection Service, Northern California Division

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection Service, 202/268-5283.

USPS v. Various Fictitious Names at 865 Ackerman Drive, Danville, CA 94526-1849

This case was investigated by the United States Postal Inspection Service, Northern California Division

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

On March 30, 1998, the Federal Trade Commission filed a civil suit in the United States District Court for the Southern District of Florida alleging that Craig Lee Hare violated

the FTC Act by offering computers and computer-related equipment for sale on various Internet auction web sites, accepting payment and failing to deliver the goods. Ultimately,

the Court issued a stipulated permanent injunction banning Hare from using the Internet to advertise, market or otherwise offer for sale any goods or services. 

This case was investigated and prosecuted by the Federal Trade Commission. 

Contact: Lisa Hone, Staff Attorney, Federal Trade Commission, 202/326-3207.

8

Illinois v. Briedis

On August 26, 1998, the Illinois Attorney General filed a civil complaint against Peter

Briedis in the Illinois State Circuit Court, alleging that Briedis violated the Illinois Consumer

Fraud And Deceptive Business Practices Act by offering merchandise for sale

using the Internet auction site eBay, accepting payment from consumers, and failing to

deliver the goods or a refund. The case was settled; the final order requires Breidis pay

restitution to 17 consumers and prohibits him from selling items through Internet auctions

in the future.

This case was investigated and prosecuted by the Illinois Attorney General.s office.

Contact: Debbie Hagan, Bureau Chief, Consumer Fraud Bureau, Southern Region,

Office of the Illinois Attorney General, 217/782-9021.

Illinois v. Fairbank et. al.

On August 19, 1999 the Illinois Attorney General filed a civil complaint against Graham

Fairbank d/b/a Fairbank Computer, Fairbank PCS and Venture Computer and against

Mark Litwin d/b/a Venture Computer alleging that the defendants violated the Illinois

Consumer Fraud and Deceptive Business Practices Act. The defendants allegedly advertised

the sale of computer products through various Internet auction web sites, including

eBay and ZDNet/FairMarket, accepted payment and then either delivered unwanted

merchandise or did not deliver any merchandise. This litigation is pending.

This case was investigated and prosecuted by the Illinois Attorney General.s office.

Contact: Debbie Hagan, Bureau Chief, Consumer Fraud Bureau, Southern Region,

Office of the Illinois Attorney General, 217/782-9021.

9

Illinois v. Chicago Copier Wholesale, Inc. et. al.

In February 2000, the Illinois Attorney General filed a civil complaint against Chicago

Copier Wholesale and Daniel Fisher, each doing business under various names. The

complaint was filed in the Illinois State Circuit Court, alleging that the defendants violated

the Illinois Consumer Fraud And Deceptive Business Practices Act by offering

copying equipment for sale using various Internet auction sites, accepting payment from

consumers, and, at least in some instances, failing to deliver the specific merchandise

offered. The Complaint also alleges that as part of the scheme, defendants used various

false names to give themselves positive feedback ratings and bid on their own merchandise

in order to inflate the price.

This case was investigated and is being prosecuted by the Illinois Attorney General.s

Office.

Contact: Debbie Hagan, Bureau Chief, Consumer Fraud Bureau, Southern Region,

Office of the Illinois Attorney General, 217/782-9021.

Illinois v. Nelson et. al.

On February 9, 2000, the Illinois Attorney General filed a civil complaint against Jay

and Kirsta Nelson, each doing business under a variety of names, including

softwarefourless, diamondsoft, and JKB Software. The complaint was filed in Illinois

State Circuit Court, alleging that the Nelsons violated the Illinois Consumer Fraud And

Deceptive Business Practices Act by offering merchandise for sale using various Internet

auction sites, accepting payment from consumers, and failing to deliver the goods or a

refund. Additionally, the Complaint alleges that in some instances, the defendants allegedly

delivered .pirated. software. The Complaint also alleges that after being suspended

from at least one auction web site, the defendants used false names and contact information

to obtain new accounts with an auction site.

This case was investigated and is being prosecuted by the Illinois Attorney General.s

Office.

Contact: Debbie Hagan, Bureau Chief, Consumer Fraud Bureau, Southern Region,

Office of the Illinois Attorney General, 217/782-9021.

10

USPS v. Various Fictitious Names at 511 West 3rd Street, Flora, IL 62839-1249

On July 28, 1999, an order to withhold mail, under the provisions of 39 USC 3003

and/or 3004, was issued by the USPS Judicial Officer against the above address. The

Order resulted in mail to that address, most of which contained payment checks, being

returned to the sender(s). The Order was the result of an investigation that determined

the respondents were involved in a failure to render scheme involving the auction of

Beanie Baby collectibles over the Internet. Losses to the known victims were estimated

to be $50,000.

This case was investigated by the United States Postal Inspection Service, Midwest

Division.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

11

12

Indiana v. Martin

On January 24, 2000, Jeffrey L. Martin was convicted in Indiana State Court on theft

charges. The defendant assumed someone else.s identity, and using that identity, offered

goods for sale via the eBay auction site, accepted payment for the goods and failed to

deliver the goods. Investigators identified approximately 50 consumers victimized by

defendant.s scam, with an approximate loss of $9,400. The defendant was sentenced to

six years in prison, all of which was suspended except for two months; he also received

six years of probation. Additionally, Martin was ordered to pay victim restitution and

was ordered to stay off the Internet while on probation. When postal inspectors learned

of this scam, quick action was taken through the USPS Judicial Officer to prevent

further victimization. An order to withhold mail, under the provisions of 39 USC 3003

and/or 3004, was issued by the USPS Judicial Officer against 434 Harlan Drive,

Mooresville, IN, the address the defendant was using. This Order resulted in mail to that

address, most of which contained payment checks, being returned to the senders. This is

an example of how a combination of administrative and criminal action can be taken to

protect consumers.

This case was investigated by the United States Postal Inspection Service, Michiana

Division, and was prosecuted by the Morgan County Prosecutor.s Office.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

IOWA

State of Iowa v. Striley

In February 2000, the office of the Iowa Attorney General filed a Consent Agreement

entered into with Karen Striley of Clinton, Iowa. The defendant allegedly offered

household items such as candlesticks for sale via Internet auction websites, accepted

payment and failed to deliver the goods. Pursuant to the consent agreement, the defendant

has agreed to a permanent injunction prohibiting her from selling over the Internet,

taking money and not delivering goods. The defendant has also agreed to reimburse

consumers.

This case was investigated and prosecuted by the Iowa Attorney General.s office.

Contact: Bob Brammer, Communications Director, Office of the Iowa Attorney

General, 515/281-6699.

State of Iowa v. Schnathorst

In February 2000, the office of the Iowa Attorney General filed, in Polk County District

Court, a Consent Agreement entered into with Daniel Schnathorst of Norwalk, Iowa.

The defendant allegedly offered camera and stereo equipment for sale via Internet

auction websites, accepted payment and failed to deliver the goods. Pursuant to the

consent agreement, the defendant has agreed to a permanent injunction prohibiting him

from selling over the Internet, taking money and not delivering goods. The defendant

also has agreed to be reimburse consumers.

This case was investigated and prosecuted by the Iowa Attorney General.s office.

Contact: Bob Brammer, Communications Director, Office of the Iowa Attorney

General, 515/281-6699.

13

State v. Arik Gentry and Jerry Dove II, d/b/a Beanmania

The Kansas Attorney General filed a lawsuit in Shawnee County, Kansas, on July 1,

1999, against Arik Gentry and Jerry Dove II, d/b/a Beanmania alleging that the defendants

violated the Kansas Consumer Protection Act by representing that they had Beanie

Babies for sale on an Internet auction site and received payments for the products but

failed to provide them to consumers. The defendants entered into a Consent Judgement

on September 1, 1999 and agreed to pay $5,364.00 in restitution to consumers and

$1,000 in civil penalties and investigative fees.

This case was investigated and prosecuted by the Kansas Attorney General.s Office.

Contacts: Assistant Attorney General Jim Welch, 785/296-3751.

Special Agent Lori Denk, 785/296-3751.

Missouri v. Marriott

On October 29, 1999, Donald L. Marriott pled guilty to criminal charges brought by

Missouri Attorney General Jay Nixon, admitting that he had defrauded consumers

seeking to purchase computer equipment on the Internet auction site, eBay. Marriott was

16 at the time the crimes occurred, and was certified to stand trial as an adult on the

charges. The plea agreement called for Marriott to pay $5,863 in restitution to 13

consumers, complete 200 hours of community service and be placed on five years

probation. While on probation, Marriott is prohibited from (1) using the Internet to buy,

sell, advertise, or trade any goods or services; (2) visiting any Internet site on which

goods or services are sold via auctions or classified advertisements, and (3) permitting

anyone else to use his computer, screen name, identification or account to do those

things described above.

This case was investigated by and prosecuted by the Missouri Attorney General.s

Office.

Contact: Office of the Missouri Attorney General, Office of Communications,

573/751-8844.

14

USPS v. John A. Wilhelm

On June 4, 1999, a Cease and Desist Order, under 39 USC 3005, was issued against

John A. Wilhelm. Under this Order, the respondent was ordered to cease and desist

from making false representations relating to the sale of computers via Internet auction

sites. An investigation determined that he had accepted payment for computers without

furnishing the merchandise. Under this order, the respondent agreed to make victim

restitution.

This case was investigated by the United States Postal Inspection Service, Midwest

Division.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

Farmer and Herr v. Arakelian et. al.

On October 1, 1999, the Attorney General of the State of New Jersey filed suit against

Barbara Arakelian a/k/a Barbara Wilson, d/b/a Bobbi1 and Halo58 and against Darren

Baker d/b/a Mugsy 430. The complaint alleges that Ms. Arakelian offered Beanie Babies

and Furbies for sale on the eBay and Amazon auction web sites, accepted payment and

failed to deliver the merchandise. The Complaint further alleges that Mr. Baker, with

assistance from Ms. Arakelian, offered to sell Bruce Springsteen tickets via eBay,

accepted payment and failed to deliver the merchandise.

This case was investigated and is being prosecuted by the New Jersey Department of

Law and Public Safety, Division of Consumer Affairs.

Contacts: Genene Morris or Jennifer Salvato, Press Office, New Jersey Division of

Consumer Affairs, 973/504-6327.

15

Farmer and Herr v. Beanie Stars, Inc. et. al.

On February 4, 2000, the Attorney General of the State of New Jersey filed suit against

Beanie Stars, Inc., Hani Kheiralla and Mohammad Kheiralla, d/b/a nada400 and

beaniestars. The Complaint alleges that the Kheirallas offered Beanie Babies for sale on

the eBay auction web site, accepted payment and either failed to deliver the merchandise,

or failed to deliver the merchandise within the time frame required under the New

Jersey Consumer Fraud Act.

This case was investigated and is being prosecuted by the New Jersey Department of

Law and Public Safety, Division of Consumer Affairs.

Contacts: Genene Morris or Jennifer Salvato, Press Office New Jersey Division of

Consumer Affairs, 973/504-6327.

People of the State of New York v. Dikhtyar

On October 18, 1999, Paul Dikhtyar was arrested and charged with larceny. The

defendant allegedly manipulated Internet auction sites and fraudulently attempted to have

bidders send him money for items other people were selling. On November 18, 1999,

the defendant was sentenced to one year probation and eight days of community service.

This case was investigated by a joint task force comprised of the United States Postal

Inspection Service, New York Metropolitan Division and the New York Police Department,

Computer Crimes Squad. The case was prosecuted by the Kings County District

Attorney.s Office.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

Melissa C. Jackson, Deputy District Attorney Kings County District

Attorney.s Office, 718/250-2600.

16

US v. Lane

On December 15, 1999, Richard Lane of Raleigh, North Carolina, was arrested and

charged with Mail Fraud and other crimes. Lane allegedly used numerous aliases and

email addresses, and offered toys, jewelry and collectibles for sale on an Internet auction

site. He purportedly accepted payments from consumers by falsely advertising he had

the items listed in his auctions and would sell them to the highest bidder. Consumers

complained of misrepresentations of the value and/or condition of the items offered for

sale, receipt of something entirely different and, in some case, receipt of nothing at all.

This case was investigated by the United States Postal Inspection Service, Mid-Atlantic

Division, and prosecuted by the United States Attorney.s Office for the Eastern District

of North Carolina.

Contact: Inspector Bill Johnson, United States Postal Inspection Service,

919/501-9314.

State of Ohio ex rel. Betty D. Montgomery v. Brenda Theos, et al.

Ohio Attorney General Betty D. Montgomery filed a lawsuit on February 11, 2000, in

the Licking County Court of Common Pleas. The lawsuit was filed against Brenda

Theos of Newark, Ohio, for alleged violations of Ohio.s Consumer Sales Practices Act.

Theos is alleged to have sold counterfeit Beanie Babies through Internet auctions.

Montgomery.s office received numerous complaints regarding the authenticity of the

products received. In some cases, the products were never received at all. Specific

allegations in the lawsuit include failing to deliver the products, misrepresenting the

authenticity of the products being sold, and using fictitious names to avoid connection

with previous bad dealings.

This case was investigated and is being prosecuted by the Ohio Attorney General.s

Office.

Contact: Jennifer Detwiler, Office of the Ohio Attorney General, 614/466-3840.

17

US v. Lansford

On January 19, 2000, Christine Lansford was indicted in the United States District

Court, Western District of Oklahoma, on 14 counts of mail fraud for allegedly offering

Beanie Babies on Internet auction web sites, accepting payment and failing to deliver the

goods. Lansford allegedly used numerous aliases to perpetrate her scheme.

This case was investigated by the United States Postal Inspection Service, Fort Worth

Division, and prosecuted by the United States Attorney.s Office for the Western District

of Oklahoma.

Contact: Joe Heaton, Assistant United States Attorney, Western District of Oklahoma,

405/553-8772.

Pennsylvania v. Cavanaugh

Pennsylvania Attorney General Mike Fisher reached an Assurance of Voluntary Compliance

with Scott Cavanaugh, owner of Cavanaugh Collections, resolving claims that

the defendant advertised brand name or authentic trademarked collectibles on eBay, but

delivered reproductions or knock-offs. Attorney General Fisher further alleged that

Cavanaugh misrepresented the value of the items offered for sale. Under the terms of

the agreement, Cavanaugh is required to comply with the Commonwealth.s Consumer

Protection Law, and pay $1,379.81 in restitution and $260 in investigatory costs.

This case was investigated by the Office of the Pennsylvania Attorney General.

Contact: Barbara Petito, Deputy Press Secretary, Office of the Pennsylvania Attorney

General, 717/787-5211.

18

Pennsylvania v. Piatt

In January, 1999, Pennsylvania Attorney General Mike Fisher filed a civil complaint

against Jamison Piatt a/k/a George Williams and George Lijerus, who allegedly took

money for toys he never delivered. According to the Complaint, Piatt advertised the sale

of nearly 500 Furbys on eBay, an Internet auction website. Piatt allegedly offered the

Furbys for $60 and promised to mail all orders on the day payment was received to

ensure delivery before Christmas. Piatt also allegedly ignored requests for refunds from

consumers who did not receive the toys. Under the terms of a settlement agreement

reached with the Attorney General.s office, Piatt was required to: refrain from operating

any mail order or Internet order business without approval from the Attorney General.s

office; pay $2,617 in restitution, $500 in civil penalties and $500 in investigatory costs,

as well as additional restitution to consumers who filed complaints within 90 days; and

deliver two Furbys to one consumer in lieu of a cash refund. In January 2000, the

settlement was modified to resolve allegations that the defendant accepted payment for

Pokemon cards he sold to dozens of consumers over eBay, but failed to deliver. Under

the modified terms of this settlement, Piatt must pay an additional $2,000 in civil penalties

and investigation costs as well as $600 in restitution to nine consumers who purchased

the Pokemon trading cards he advertised for sale. Piatt also must deliver more

than $2,200 worth of Pokemon cards to 38 additional consumers.

This case was investigated and prosecuted by the Pennsylvania Attorney General.s

Office.

Contact: Barbara Petito, Deputy Press Secretary, Office of the Pennsylvania Attorney

General, 717/787-5211.

19

20

US v. Saunders

On September 20, 1999, David M. Saunders was convicted on charges of mail fraud.

The defendant posted approximately 60 Internet auctions and, after collecting the bidders

. money, failed to render the merchandise.

This case was investigated by the United States Postal Inspection Service, Philadelphia

Metropolitan Division, and prosecuted by the United States Attorney.s Office for the

Middle District of Pennsylvania

Contacts: David Barasch, United States Attorney for the Middle District of Pennsylvania,

717/221-4482.

Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

USPS v. Various Fictitious Names at 224 E 21st Avenue, Munhall, PA 15120-2524

On July 6, 1999, an order to withhold mail, under the provisions of 39 USC 3003 and/

or 3004, was issued by the USPS Judicial Officer against the above address. The Order

resulted in mail to that address being returned to the sender(s). The Order resulted from

an individual using Internet auctions to defraud individuals in a failure to pay scam.

Using fictitious names and addresses, he accepted payment from the auction winners and

failed to provide the advertised merchandise.

This case was investigated by the United States Postal Inspection Service, Western

Allegheny Division.

Contact: Rob Bethel, National Public Information Officer, United States Postal Inspection

Service, 202/268-5283.

21

South Dakota v. Global Shopping Network

South Dakota Attorney General Mark Barnett entered into a settlement with the Global

Shopping Club, Inc., a company that auctioned goods over the Internet. The company

allegedly sent consumers items that were defective or different than those ordered. In

addition, some consumers did not receive purchases at all, but were charged for the

items on their credit cards. The company is enjoined from conducting any future business

over the Internet, and will pay $31,784.73 in consumer restitution.

This case was investigated and prosecuted by the South Dakota Attorney General.s

Office.

Contact: Roxy Everson, Director of Operations, 605/773-3215.

In the Matter of Maura M. Werts

On February 19, 1999, the State of Wisconsin, Department of Agriculture, Trade &

Consumer Protection, issued an order finding that, in violation of Wisconsin state law,

Maura M. Werts offered items using the Internet auction site eBay, accepted payment

and failed to provide the goods for at least several weeks after payment was made,

misrepresented the goods she was auctioning, or misrepresented the time it would take

to complete the transaction and delivery of goods sold or auctioned. Under the order,

Maura Werts is required to ship merchandise within 14 days of receiving payment or to

furnish a refund to the buyer.

This case was investigated and prosecuted by the State of Wisconsin, Department of

Agriculture Trade & Consumer Protection.

Contact: Glen Lloyd, Public Information Officer, State of Wisconsin, Department of

Agriculture, Trade & Consumer Protection, 608/224-5007.