http://www.signonsandiego.com/news/northcounty/20031116-9999_1mi16ebay.html
Stolen items find way onto Internet
N. County cases show goods easily fenced at Web auctions
**By Dana Littlefield **
UNION-TRIBUNE STAFF WRITER
November 16, 2003
The ads fail to mention, however, that some of the items up for sale might be stolen.
Recent court cases in the North County and around the country show that the Internet has become a handy way for criminals to fence all sorts of stolen goods, from computer equipment to cars.
“We’ve seen everything and it’s high dollars,” said Rafael Acosta, a prosecutor with San Diego’s Computer and Technology Crime High-Tech Response Team. The team includes representatives from the San Diego County District Attorney’s Office and Sheriff’s Department, the San Diego Police Department and the FBI.
Although most of the transactions online are legitimate, authorities say auction sites like eBay and Yahoo! make it easy for thieves to unload their loot in cyberspace through swift negotiation and anonymity. Buyers often have no idea the items they’ve purchased were illegally obtained.
Officials with eBay Inc. say they have safeguards in place, but concede a tiny fraction of the goods sold on the Web site were stolen. With about 2 million new listings each day, they say they realistically can’t check every one.
Craig Turner, owner of a high-performance-bicycle shop in Encinitas, found that out the hard way.
Last June, he learned one of his employees had stolen nearly $70,000 worth of merchandise and hidden it in garages in Oceanside and Solana Beach. Of that, more than $48,000 worth had been sold on eBay.
Jay Woolwine, 38, who at the time was general manager at Turner’s store, Nytro Multisport Technology, was arrested June 16 and later convicted for stealing fully assembled high-performance bicycles, frames, wheels and cycling apparel. After searching the Internet, Turner uncovered more than 50 transactions on eBay registered under the name “Bubba,” which he knew to be a name Woolwine used online.
“We know that he took more than that because there were some empty boxes in his garage (in Oceanside),” Turner said. “He might have sold them on some of the other sports sites.”
But Turner is particularly upset with eBay, which he said hasn’t done enough to prevent thieves from selling stolen merchandise.
“What really gets to me is that eBay is almost a legal front for all of this that’s going on,” Turner said. “You’re making money out of other people’s misfortune. A lot of these sellers are crooks.”
Shannon Stubo, an eBay spokeswoman, said the San Jose-based company prohibits the sale of stolen items on its Web site and monitors transactions to make sure users follow the rules. However, it is difficult for the company to recognize if an item is stolen just by how it’s listed, she said.
Typically, users notify the company when they recognize their own property being sold on eBay. The matter is then referred to the company’s Trust and Safety team based in Salt Lake City, which works directly with law enforcement, Stubo said.
Some 16 million items are currently listed on eBay, and only one-one hundredth of 1 percent of all transactions result in a confirmed case of fraud, Stubo said.
Turner argues that any high volume of new, unused material being sold on eBay should cause the company concern. It’s one thing for a person to clean his or her garage out and sell the items on eBay, he said, but if an individual sells 50 or more items – all in original packaging – it’s likely the items are stolen.
“I think it’s absolutely a red flag if any nonbusiness is selling new products,” Turner said. “If they had one or two items they could say it’s a Christmas gift. It’s absolutely, plainly obvious if you have a complete range of new product (being sold on the Internet).”
But Stubo said new items wouldn’t necessarily alert the company to a problem. About 60 percent of the merchandise on the Web site could be considered new, she said.
In the past six months, at least one other eBay-related theft case occurred in North County. It involved a Vista man who reported guitars, an amplifier and other music equipment stolen from his car.
The victim told sheriff’s deputies it would be highly unlikely that another person, who happened to live within five miles of where the theft occurred, would possess the exact combination of musical equipment, some of it rare. The items were listed for sale on eBay only five days after the theft.
Sheriff’s deputies searched the home of the man under whose name the items were registered online, but did not find the stolen goods and the man was not charged. The items might have already been sold, authorities said.
Cases like these are often referred to law enforcement by the Internet Fraud Complaint Center, a partnership between the National White Collar Crime Center and the FBI organized in May 2000.
Between 2001 and 2002, the IFCC Web site received 75,063 complaints ranging from auction fraud, credit card fraud, computer intrusions and unsolicited e-mail to child pornography. Of those, Internet auction fraud was by far the most reported offense – 46 percent – according to the agency’s annual report for 2002.
Most of the fraud cases deal with people selling items on Internet auction sites, then either failing to deliver the goods or delivering something entirely different from what they posted on the Internet.
“It’s a huge problem,” said FBI special agent Lori R. Jensen, the San Diego division’s Internet fraud coordinator.
Such cases are often investigated and prosecuted by local agencies, she said, but several factors, including the dollar value of the stolen property, number of victims and location of victims (particularly if the goods were sold internationally) can raise the crime to a federal offense.
Jensen said the FBI partners with various state and local law enforcement agencies, as well as private companies, to brainstorm new ways to track Internet fraud and educate the public on how to avoid becoming victims. It is particularly important for private companies to maintain evidence of fraud when they identify it. Because of the fluid nature of the Internet, evidence can be lost with the click of a mouse, Jensen said.
Investigators say eBay is generally good about working with law enforcement to track down perpetrators of Internet fraud. But they say the company can’t be expected to investigate every potential seller who may be auctioning stolen property.
“EBay is just a clearinghouse,” Acosta said. “They’re no different from the New York Stock Exchange. They bring buyers and sellers together. Nothing goes through eBay.”
One safeguard available to buyers and sellers on eBay, he said, is that the site allows them to rank each other, theoretically exposing the crooks. But even that isn’t foolproof.
“What we have seen is some of the more sophisticated of the thieves will submit recommendations on their own behalf,” Acosta said.
Prosecutors warn consumers to use the same caution and common sense when buying online that they would if they were approached by a stranger selling goods on the street or at a swap meet.
Craig Turner, the Encinitas bike shop owner, agrees.
“Now we have an international swap meet,” he said. “They should call it swap-net.”