Schemes, Scams, Frauds.

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Internet Auction Fraud and Western Union Payment for Undelivered Goods Scams

Internet Auction Fraud Information Article

I was sold a stolen vehicle on eBay. I wired the money to the seller instead of using my credit card because the seller said he didn't want to make the transaction through his business. When I received the bill of sale on the vehicle, the bill of sale was from his business.

I'm sure this was done because he didn't want a "charge back" made to his account through Visa, knowing that the vehicle was stolen. How do I go about filing wire fraud charges against the seller? The FBI doesn't seem to want to get involved because the sale was under $5,000.

How do I go about prosecuting and getting my money back? This person owns two businesses in Alabama and doesn't feel he is responsible for returning my money. Please give me any links or other help that you can provide. Ebay was helping me I thought, but now they won't respond to my e-mails.

Thank You, John Lowry. 03/17/02

Internet Auction Scam (non delivery of goods or misrepresentation)

On Friday, Feb 22, I visited UBID.com and placed a bid on a large-screen HD-ready 42" Toshiba TV. On Saturday, Feb 23, I received an e-mail from the seller, requesting payment of $950 via Western Union.

I replied, asking for his name, address, and shipping information which he gave as:

Steven Colon
penilous_07@yahoo.com
52 Brentwood Ave
Ventura, CA 93002

On Sunday, Feb 24, the seller sent me an e-mail asking why I hadn't sent him an MTCN # and if I still wanted his TV.

On Monday, Feb 25, I replied that I wasn't on-line the previous day, but would try to get it to him that day. Later that evening, he sent another e-mail saying "I think that you don't want to make business with me. I must put the TV up for sale because I need money. E-mail me soon to know what to do."

On February 26, I used Western-Union's on-line service to wire him the money at the address given and sent him a confirmation e-mail to which he replied saying that he was in New York on business, and would I please tell Western Union to allow him to pick up the money there. I arranged this by phone.

On March 1, I checked the status of the wire using Western Union's web page. It showed that the money had been picked up in New York so I sent an e-mail to the seller asking when the TV would be shipped. He replied "1-2 days, max."

Nothing ever arrived.

On March 12, growing very concerned, I e-mailed him asking for shipping information. There was no reply. I e-mailed him again on March 13, 14, and 15. Then, on the 17th, I sent a message via ubid's service, explaining that to avoid legal trouble, he needed to respond immediately.

On the 18th, I reported the fraud to Ubid and Western Union. At their suggestion, I filed a complaint with the National Fraud Information Center but got no reply.

I notified Yahoo of the fraudulent use of the penilous_07 ID. By expanding the original e-mail headers I was able to determine 4 distinct IP addresses:

194.102.86.243, / 194.102.86.247, / 205.188.238.141, / 64.49.77.194

Then, using VisualRoute, I was able to trace the first two to Flamingo Computers in Bucharest, Romania. I contacted the IP owner Cristi Mocanu who indicated that they belong to an Internet Cafe his company provides service for, but that it was impossible to trace them any further, since anyone can use these publicly available terminals.

The third IP is a dynamically assigned IP From America Online. I contacted AOL's fraud department online, and supplied them with the relevant information.

The fourth address is most disturbing as it belongs to the SAUDI ARABIAN UN Mission in New York where the money was picked up.

Seeing the connection between Saudi Arabia and Eastern Europe instantly suggested to me a possible terrorist money-gathering scheme with money flowing through otherwise untraceable channels to Romania and then potentially to the Middle East.

Ubid explained that under the ID's of penilous_07 and MRLUKA, this person has defrauded others and Flamingo Computers told me that many people have reported fraud of substantially greater dollar amounts than mine.On an average day they "auction" about a MILLION dollars worth of "equipment" on uBid alone.

The auctions (in hindsight) are now easy to spot. A 50" or 60" Plasma TV is a prime example. That's a $10k - $16k piece of hardware, and it'll be advertised for $1350, with a "New Seller" claiming to be from Spain or London and they all request payment by Western Union wire.

On one day this week, in just the Plasma TV section, I spotted 18 obvious frauds out of 25 "Consumer Exchange" auctions. Most of those "Sellers" had 3-5 other auctions in other Consumer Electronics sections (DVD players, laptops, etc) that were equally implausible. And it seems people can't bid fast enough.

They must have agents in New York, London, and Spain to pick up money, but the operation definitely appears to be run out of Bucharest as ALL the scammers I have contacted have had IP addresses in Bucharest.

uBid seems unable or unwilling to address the problem - most likely because they get paid either way. Perhaps you can warn people to be wary of this multi-million dollar scam which continues to go on day after day.

Jim Harris of Raleigh, NC 03/29/02

Re: Police investigation Jim is requested to call Andrey Khrychikov at work in Los Angeles, CA at 213-615-0613. His email is conank@capgroup.com

From One to Many

04/02 - Frank Richard Nickens, who with a partner defrauded 67 Ebay users of nearly $230,000 between February 1999 to February 2000, was sentenced to 27 months in prison and ordered to pay restitution.

He had pleaded guilty to the crimes, but appealed the penalty saying that his scam wasn't applicable to rules calling for an escalation of the offence as when a fraud is conducted via "solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to ... purchase goods or services" since the 67 counts of his indictment referred to specific individuals who were directly targeted by his e-mail and con was really 67 one-to-one transactions, not mass-marketing.

He had used a "harvesting program" to obtained contact information for Ebay users who had been unsuccessful bidders in online auctions then in subsequent e-mail to the victims he claimed to have the same or a similar product for sale but wanted to deal directly with the customer and avoid the utilization of auction businesses.

Then he would ask that money for the products be wired or sent by certified check to his bank accounts, but never deliver the goods.

The Appeals Court panel supported a lower court's ruling that a conviction on 67 counts of wire fraud was worthy of greater penalties under a federal law which takes a dimmer view of "mass-marketing" scamsters.

In refuting other points raised by Nickens, the three person panel said the fraudster had indeed "solicited his victims by targeting and pursuing them individually," but it ruled that there was nothing in the law that would limit the definition of mass-marketing to pitches targeting a group or class of people "such as the elderly, families, etc."

I was interested in seeing an animated Japanese series called Sailor Moon Sailor Stars but the only way to see it is to buy it as a fansub which are tapes sold by fans. They are usually subtitled and some say illegal.

Well, I ordered 2 tapes for $14 altogether and sent my money to Fred Del Rosario eight months ago. He has an internet business called Sailor Moon and Anime Fansubs.. He didn't send the tapes and appears to actively ripping others off by not providing anything for remitted funds.

Fred Del Rosario
20926 22nd Ave. W
Lynnwood WA  98036

Sent in by Akasha B. Lover 05/25/02

I believe that I have become a victim of fraud along with a group of other people.

Last week on ebay I noticed a seller named dubbz2002 selling rims so I checked out his website http://dubbz.itctv.com then emailed him at Dubbz1000@aol.com.

He said I should send the money to.

John Robinson
732-752-6861
147 Pleasant View Drive
Piscataway, NJ 08854

I sent a check for $890 which specifically stated that it was for the rims which he endorsed.

I have since found out that his username along with the email address that he was using was cancelled but eBay gave me this info on that user name..

Illianexy Perez
Bloomfield, NJ
(973) 748 -1225

I called this number and the people that answered said they knew nothing then tried calling John Robinson at 732-752-6861 but all I received was a voicemail.

What are my options in pursuing this person and either getting my product or my money back.

Sangkra 06/01/02

Old Bike Barn
P.O. Box 48  NDG St.
Montreal QC Canada

Individual named Barrie Houghton is selling used motorcycle parts on E-Bay. Used Oldbikebarn ID from April 30, 2002. From feedback he apparently had unhappy customers. Changed ID to Bikebarnbros May 14, 2002 and has now unregistered this ID which allows E-Bay to avoid any middle-man position.

Is glad to quickly accept your money, but allegedly procrastinates on shipping goods. Refuses to answer e-mails. Has telephone answering machine, but will not return calls.

Russ 08/07/02

FTC Settles With Web Auction Scammer

By Roy Mark

10/03 - The Federal Trade Commission (FTC) has settled with an Internet scammer who used auction sites to "sell" computers and musical equipment that he never delivered. The settlement bars for life Morgan Engle of Atlanta from selling goods or services through Internet auction sites.

Engle also agreed to pay $5,820 for consumer redress and to post a $35,000 performance bond before engaging in any telemarketing activities.

In April, the FTC targeted Engle as part of Operation Bidder Beware, a law enforcement crackdown by the FTC and 29 state attorneys general targeting Internet auction fraud. That initiative resulted in 57 criminal and civil law enforcement actions and a related consumer education campaign. Auction fraud is the single largest category of Internet related complaints in the FTC's Consumer Sentinel database, which logged more than 51,000 auction complaints in 2002.

The FTC filed suit against Engle in U. S. District Court in Atlanta, charging that he advertised computers and musical instruments and equipment for sale on various Internet auction sites. As the bidding progressed, he sometimes circumvented the auction house process by e-mailing consumers or telephoning them to encourage the purchase and discuss payment terms and delivery details. But he rarely delivered the goods and rarely provided refunds, according to the FTC.

The agency alleged that Engle's practices violated the FTC Act and the Mail Order Rule. The settlement ends the litigation.

The FTC alleges that in one case, which has not been settled, the defendants combined auction fraud with serial identity theft to conceal their identities and divert the blame to the identity theft victim. In that case, the FTC charges that, since early 1999, one operator constantly changed his Internet auction account name to conceal the fact that although he accepted payment, he did not deliver the promised merchandise.

According to the FTC, in 2001, he added a new wrinkle. While he allegedly continued to advertise and accept payment for merchandise he never delivered, he embarked on serial identity theft. The FTC claims that he set up bank accounts and post office boxes in other people's names, and directed that payment be sent to them.

Consumers and law enforcers believed the identity theft victims were the ones who had bilked the consumers out of their money. According to the FTC, his identity theft victims were people with whom he had feuded, people whose identity information he and an accomplice had taken from the records of a suburban Chicago hotel, and even a dead man. A U.S. district court in Chicago has ordered a halt to the scam and frozen the defendant's assets to preserve them for consumer redress.

Auction scammers often establish a good member rating on eBay by ordering and paying for inexpensive items such as CDs or videos. Then, once a good credit is established, they can begin auctioning off more expensive equipment which do not exist, intent on defrauding the winner.

Purchasers who send off payment are left without any recourse and suffer a total loss.

Fake ID Used for Picking up Western Union Transfers

03/04 - Selene Stewart was trying to buy a speaker system on eBay. Instead of bidding, she could "buy it now" at a set price. The only requirement was that she had to be "pre-approved." In other words, the seller wanted to make sure she really had the money.

The seller suggested Selene use Western Union's money transfer service. Selene would send money in her husband's name to a Western Union office in London. It would prove that she had the money, and it would be protected because only her husband could pick it up.

Huge mistake.

Selene wired $1,000. Less than an hour later, someone walked into the Western Union office with a fake ID and picked up the money.

Selene is understandably upset with Western Union, but a company representative said that it can't check the validity of every ID presented.

Western Union does say that it has become the innocent middleman in a lot of scams. Crooks involved in everything from advance-fee loan scams to Internet rip-offs are using the service. They do it for two reasons: It's a quick and easy way to get money anywhere in the world. Sometimes it can be picked up with an answer to a security question and no ID. It also avoids the U.S. Postal Service, which means no postal regulations are broken.

It's not often that a company tells you not to use its services, but that's exactly what Western Union is saying. It wants you to know that you should not use Western Union's transfer service to send money to people you don't know. It has a division called Western Union Auction Pay for eBay purchases.

Online Job Offer May Advance to Career Making License Plates

Internet users should beware of people from other nations who send e-mail to Americans and ask for them to accept and wire cash on their behalf.

They say they want to be able to sell items in the U.S. and need someone who would wire the money out to them. They get onto eBay, sell items that they're not going to deliver and then tell the buyers to wire money into the third party's account.

After the third-party victim sends the money to the scam artist, usually by Western Union, the buyers start making claims for the undelivered goods. The victim who accepted their money is liable for paying it back.

Police Have "Reserved" a Cell for Auction Scammer

One scammer is accused of setting up auctions on eBay using photographs of cars he did not own and setting the "reserve" amount higher than most people would expect to pay for the car as a way to make contact with potential victims.

A reserve amount is the minimum payment a person will accept for an eBay auction item and is a secret figure only known to the Web site and to the seller.

Allegedly using the list of people who bid on the item and knowing the amount they were offering, he apparently contacted them independently of eBay with an offer to sell them the cars, then failed to deliver.

Post Online Auction Success Leads to Certain Failure by Fraud

CHICAGO - 08/06 (UPI) -- Investigators have said that Chicago is home to cells of Internet fraudsters who are responsible for as many as 300 eBay scams.

Law enforcement sources said criminal organizations controlled by Romanians and other Eastern European nationals have set up shop on Chicago's north side to scam hundreds of out-of-state buyers and sellers on the Internet auction site.

Scammers apparently recruit drug addicts and recent immigrants to pick up Western Union money transfers and hand them to cell leaders, who the sources suspect wire the money to bosses in Eastern Europe.

The scammers choose out-of-state victims to prevent attention from local law enforcement.

The Internet auctioneer has urged users to use the secure PayPal payment system, which guarantees transactions and avoid organizations that do not offer guarantees.

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