Learn About Multiple Bidding Auction Fraud From a NY Defense Lawyer
Auction fraud is a frequent problem on eBay as well as other online auction websites. Around 25 percent of all complaints of fraud reported to the Internet Crime Complaint Center involve some type of online auction fraud accusation. Both buyers and sellers may be at risk of being held responsible for fraud.
One of many types of auction fraud is called multiple bidding auction fraud. When this type of fraud offense occurs, a seller receives less for an item than he would if the auction had been legitimate. The seller can sometimes pursue a claim for compensation in a civil action. Those accused of the fraud offense could also face state or federal criminal charges. A NY auction fraud lawyer can provide legal representation in cases where accusations of multiple bidding auction fraud have been made.
What is Multiple Bidding Auction Fraud?
Multiple bidding auction fraud involves a buyer placing multiple bids on an item using different identities or aliases. Some of the bids are very high and are designed to scare away legitimate bidders who may be interested in purchasing the item. Other bids are very low. The alias that made the high bids retracts the bid at the last minute. The auction ends up closing for one of the low bids made by the other alias. This means the seller sells the item for a small fraction of what might have been received if the false high bid had not been placed.
Multiple bidding auction fraud is essentially the opposite of shill bidding. While shill bidding is a form of fraud used by an auction seller to drive the price higher through fake bids using aliases, multiple bidding is an attempt to drive the price lower with fake bids.
Penalties for Multiple Bidding Auction Fraud
In many cases, multiple bidding auction fraud goes unnoticed and the buyer simply receives a good deal on the item. Sometimes, however, multiple bid retractions can attract attention and trigger an investigation. When it is determined that bids are being made to manipulate the price of an auction, criminal charges may apply.
Under New York State law, prohibitions on bid rigging and price fixing are found in the Donnelly Act (New York’s General Business law Code section 340-347). The Donnelly Act has been applied to online auctions in which bid rigging took place. Possible penalties may include a $1 million fine for businesses, a $100,000 fine for individuals, up to four years in prison, and a felony criminal record. While past criminal cases arising under the Donnelly Act have often focused on shill bidding and efforts to drive up the price, making false bids to drive the price down could also potentially be a crime tried under this Act.
Because wire communications are often used in multiple bidding auction fraud, a defendant could also be charged with wire fraud under 18 U.S. Code Section 1343. Wire fraud is a federal offense and a convicted defendant could be sentenced to a maximum of 20 years in federal prison.
A NY Auction Fraud Lawyer Can Represent You
In order for you to be convicted of any crime related to multiple bidding auction fraud, a prosecutor must show beyond a reasonable doubt that you violated the law. Whether you are being prosecuted by a NY district attorney or a U.S. Attorney at the federal level, you need to have a knowledgeable legal advocate who cares about your case and who fights for you.
Bukh Law Firm, PLLC has successfully defended many clients accused of auction fraud crimes. Call our NY eBay criminal defense lawyers today to schedule a consultation and learn more about the legal assistance we can provide.
