Sixteen Persons Charged in International Internet Fraud Scheme

LAS VEGAS—Federal charges have been unsealed against 16 individuals for their involvement in an international Internet scheme that defrauded online purchasers of purported merchandise such as automobiles and other items.

The defendants are charged with wire fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and criminal forfeiture.

According to the allegations in the indictment, from about December 2008 to December 2011, conspirators situated outside of the United States listed and offered items for sale on Internet sites (such as Craigslist and Autotrader) and occasionally also placed advertisements in newspapers. The items offered for sale included automobiles, travel trailers and watercraft. The conspirators typically offered the items at attractive prices and often stated that personal exigencies, such as unemployment, military deployment, or family emergencies, required that they sell the offered items quickly.

To gain the confidence of prospective buyers, conspirators posing as owners of the items instructed buyers that the transactions were to be completed through eBay, Yahoo!Finance, or similar online services, which would securely hold the buyers’ funds until the purchased items were delivered. The conspirators sent e-mails to buyers which appeared or purported to be from eBay, Yahoo!Finance, or other such entities, and which instructed buyers to remit payment to designated agents of those entities who were to hold the purchase money in escrow until the transactions was concluded. In reality, the entire transaction was a sham: the conspirators did not deliver any of the items offered for sale; neither eBay, Yahoo!Finance, nor any similar entity participated in these transactions; and the purported escrow agents designated to receive buyers’ purchase money were actually participants in the scheme who received the funds fraudulently obtained from buyers on behalf of the conspiracy.

Relying on the schemers fraudulent representations, scores of buyers agreed to purchase items that the schemers offered online and in newspaper advertisements. The conspirators kept and converted the fraudulently obtained purchase money for their own purposes. The defendants and their associates allegedly obtained more than $3 million through the fraud scheme, which they distributed among the conspirators both inside and outside the United States.

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