Back in 2012, eBay saw more than $175 billion in commerce, and at that time, eBay’s CEO projected that the site would enable more than $300 billion in commerce by 2015, according to CNBC. Most of the auctions held on eBay are legitimate sales that allow seller and buyers to connect over items ranging from collectibles to electronics to automobiles. However, some auctions are shell auctions created solely for the purpose of defrauding and misleading buyers.
Although eBay has seller and buyer protections in place, there are still cases of fraud scams across the popular auction site platform. Online auction sites make it possible for sellers to receive information and money from buyers and, in some cases, sellers misuse the information gathered. If an online auction site is the site of criminal activity, state and federal authorities may also conduct investigations if they suspect that someone is breaking the laugh via auction fraud crimes.
If you or someone you love has been accused of an auction fraud offense, including running a shell auction, consider seeking legal counsel as soon as possible in order to properly defend yourself, avoid incarceration and reduce the likelihood that authorities will require restitution or seize your assets. For more information about shell auctions and online auction fraud or to get legal assistance for your case, contact Raiser & Kenniff, PC today.
Shell Auction Overview
In short, a seller conducting a shell auction has no goods for sale. The purpose of this type of auction is either to get buyers to pay for items that, in reality, the seller does not have or to obtain personal and financial information from a buyer such as name, address and credit card information. Shell auction schemes can take a number of forms such as:
– Failure to ship merchandise or non-delivery scams. A buyer pays for a product and the seller never sends the item to the purchaser.
– Escrow service scams. A buyer wins an item and is instructed to make payment via an escrow service. Unbeknownst to the buyer, the escrow service is fake, and the buyer does not receive the product. In some instances, buyers are required to provide credit card numbers, bank account numbers and other financial information to the “escrow service.” The seller can then use these details to access the buyers’ accounts and transfer money without their authorization.
– Wire transfer scams. The seller sets up an auction, a buyer places a bid and wins an item that the seller does not have, and the buyer submits money to the seller via a wire transfer. Since the seller does not have the merchandise, the buyer does not receive the product and the seller keeps the money.
Shell Auction Penalties
Since money is taken from the buyer, setting up a shell auction may be considered a form of theft, or larceny. When the seller uses a wire transfer service, the post office or the Internet to obtain money, request funds or solicit bids, the seller may be charged with certain federal offenses such as bank fraud, mail fraud and/or wire fraud. If the purpose of the shell auction is to illegally access and utilize financial information, bank accounts or credit card information, the scam could result in criminal fraud charges.
Each of these offenses is serious. Bank fraud, wire fraud and mail fraud alone each carry maximum penalties of 20 to 30 years in jail, while identity theft and larceny are both considered felony offenses in the state of New York depending on the amount of money taken or solicited in the scam.
You Need a New York Defense Lawyer On Your Side
Due to the severity of the consequences, it is imperative that you work with a professional shell auction fraud lawyer to help protect your rights. There may be instances in which there is insufficient evidence that you violated the law. In other cases, you might have intended to adhere to the terms of the auction and send the item, but life happened and prevented you from doing so. Raiser & Kenniff, PC can provide legal advice and guidance to help you if you are facing accusations of running a shell auction. For more information about our services or to speak to our legal team about a possible case, please contact us today.