Three eBay sellers pleaded guilty to criminal charges stemming from actions they took to inflate the prices of artwork and other merchandise that was sold in eBay auctions, according to New York's State Attorney General Eliot Spitzer. The defendants were known by various eBay User IDs including "sambuca914," "gutek914," "zugnicht," and "fourlizards." In two other cases, defendants entered into civil settlements with the Attorney General's office for illegally bidding up sports memorabilia and automobiles sold in online auctions.
According to the criminal charges, three eBay sellers cast bids in over 1,100 of each others' eBay auctions for the sole purpose of driving up the price of the merchandise that they offered for sale over a five-year period. The practice is known by eBayers as shill bidding, which is against eBay's policy.
The Attorney General's office reported that Jerrold Schuster, former owner of the New Windsor Auction Gallery, pleaded guilty to Combination in Restraint of Trade, a violation of the New York antitrust law, a felony punishable by a maximum of four years in prison, and that Schuster's former employees pleaded guilty to Attempted Combination in Restraint of Trade, a misdemeanor antitrust violation, punishable by up to one year in prison.
In one auction, according to the AG, Schuster's New Windsor Gallery "shilled up" by more than $7,300 an oil painting attributed to Hudson River School artist Ralph Blakelock (1847-1919). As part of the disposition, the office said Schuster is expected to pay $50,000 in restitution and fines.
In a separate civil case, Robert Baranovich and his son, Steven Baranovich, of West Babylon, agreed to pay $10,000 in penalties and restitution to consumers harmed by their shill bidding. In a complaint filed with the Consent Order settling the case, the Attorney General alleged that the Baranoviches placed 170 phony bids in 165 of their own eBay auctions of sports memorabilia.
In another civil case, Richard Eggleston, Darryl Lien, and David Printy, together with a related corporation, Daryl Lien, Inc., agreed to pay more than $28,000 in penalties and restitution for their shill bidding practices. In a complaint filed with the Consent Order, the Attorney General alleged that they placed 610 bids in 106 of their own auto auctions under the user ID "Mother's Custom Automotive NY Dealer."
The Attorney General's office has identified more than 120 consumers who paid more for items as a result of shill bidding activities in the three cases.
Earlier this year, three eBay sellers pled guilty to shill bidding in an infamous case of art fraud that included an item that was made to look like a painting by famed artist Richard Diebenkorn. Kenneth Fetterman was one of three men who allegedly spearheaded a fraudulent bidding scheme on eBay for nearly two years. He was sentenced May 25 to 46 months in prison and ordered to pay $94,000 in restitution by the Eastern District Court of California.
