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US lawyer and pals indicted for shill bidding on eBay

$450,000 scam scuppered

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Two men in the US, one of them a lawyer, have agreed to pay back $100,000 after pleading guilty to bidding for their own products on eBay's online auction site.

In what is believed to be the first indictment for such cyber-behaviour, Kenneth Walton and Scott Beach pleaded guilty in federal court in Sacramento to a total of 11 charges of wire and mail fraud.

The duo agreed to pay back the cash and not take part in any online auctions for up to three years as part of a plea bargain arranged to reduce their prison sentences - the pair had each faced up to five years in jail for each of the criminal counts, AP reports. Walton was also disbarred as an attorney in California.

The men ran a scam that duped art buyers out of $450,000 by using "shills" (bidding on their own products) to inflate prices in around 500 online auctions on eBay between 1998 and 2000.

Authorities are still chasing a third man indicted in the scam - Kenneth Fetterman, but he has so far eluded them and remains a fugitive.

Officials started sniffing around the three after a fake painting by US painter Diebenkom fetched more than $135,000 on eBay. Walton claimed to have found the painting at a garage sale but said that his wife wouldn't let him keep it, so he put it up for sale with a starting price of 25 cents. The bids rolled in, and so did the press. eBay smelt a rat and declared the sale void after saying it suspected shill bidding.

The men are due to be sentenced on June 26. ®

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AP article

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