Just more proof that ebay is nothing but a sleazehole. Avoid IT like the plague!


Jeweler to Pay $400,000 in Online Auction Fraud Settlement
By BARNABY J. FEDER
Published: June 9, 2007

A Manhattan jewelry dealer who directed his employees to secretly place bids that inflated the price of goods his company auctioned on eBay has agreed to pay $400,000 to settle a civil fraud complaint, the New York attorney general, Andrew Cuomo, said yesterday.

The settlement also bars the merchant, Ezra Dweck, and his company, the EMH Group, from participating in online auctions for four years, according to a statement by Mr. Cuomos office. The settlement includes a $100,000 fine and $300,000 in restitution.

EMH deals in large quantities of diamonds, gold and platinum jewelry and supplies most of the major U.S. chain stores, according to the companys Web site. Mr. Cuomos lawsuit said Mr. Dweck listed items on eBay as having no reserve price meaning they would be sold no matter how low the highest bid was but that he distributed spreadsheets to employees instructing them on what bids they should place to drive up the final sale price.

Mr. Cuomo said the company placed 232,000 bids totaling more than $5 million over a one-year period.

The deceptive practice of insiders posing as bidders, known as shill bidding, has a long and notorious history in traditional auction markets. It has become a growing concern for the operators of online markets and regulators.

Ebay, the nations largest online auction marketplace, with more than 200 million registered users, brought the suspicious bidding patterns involving EMH to the attention of the attorney general at the time Eliot Spitzer late in 2005. The office took more than a year to complete its economic analysis before filing the complaint.

Ebay has installed a number of policies and surveillance tactics aimed at curbing shill bidding.

State and federal authorities have brought civil and criminal charges involving shill bidding against online auctioneers selling goods including computers, artwork and automobiles.

Mr. Cuomos office estimated that Mr. Dwecks practices had inflated the prices on the jewelry that EMH sold by 20 percent.

Mr. Dweck could not be reached for comment yesterday.

-- Edited by budnonymous at 18:03, 2007-06-09