Three men who allegedly plotted to push up bids on eBay Inc.’s Internet auction site have been charged with bilking art buyers out of $450,000 for works they touted as being painted by such modern masters as Edward Hopper and Richard Diebenkorn, according to Rueters.
The U.S. Attorney’s office charged the three with 16 counts of wire and mail fraud for allegedly using illegal “shill” bids (self-bids) to inflate prices in more than half of some 1,100 auctions they hosted on eBay between late 1998 until May 2000, the report said.
Officials say this is the first known indictment for such practices online. Each count carries a maximum penalty of up to five years in prison and $1 million in fines, and authorities are also seeking mandatory restitution.
Authorities allege Kenneth Walton, 33, of Sacramento, CA, Kenneth Fetterman, 33, of Placerville, CA, and Scott Beach, 31, of Lakewood, CO, set up fake e-mail accounts and used more than 40 phony online identities to trick others into believing the bids they placed were genuine, the report said.
Officials began probing the three men after Walton offered a phony painting by Diebenkorn on eBay that attracted a final bid of $135,805. Walton listed the abstract painting with an opening bid of 25 cents, saying he had found it at a garage sale and his wife had refused to let him keep it., according to the report.
The indictment also accuses the men of ratcheting up prices on works they claimed were signed by other renowned artists including French painter Maurice Utrillo and Americans William Wendt and Edward Hopper.
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