Five Charged in Los Angeles with Fraud In Internet Auctions
By Damon Marturion
New Business News Staff Writer
Five defendants, including a former professional football player, have been charged with federal fraud charges for allegedly offering items for sale on Internet auction services and failing to provide merchandise promised to those who paid for various goods.
Federal officials in Los Angeles today announced the filing of three criminal cases, involving a total of five Southland defendants, who are accused of taking money from unsuspecting victims who thought they would receive various items for being the highest bidder in a particular auction.
"These cases demonstrate that shoppers on the Internet must be careful," said Acting United States Attorney Consuelo S. Woodhead. "Those purchasing goods on the Internet should have a complete understanding of the terms of the sale, and those who are suspicious should consider using an escrow service."
Those who believe they are victim of Internet fraud can file complaints with the government at http://www.ifccfbi.gov, which is a joint effort between the Federal Bureau of Investigation and the National White Collar Crime Center.
Today’s announcement was triggered by the indictment this morning of Kevin McLain, 47, of Newport Beach, who was a linebacker with the Los Angeles Rams from 1976 to 1979. A federal grand jury in Los Angeles charged McLain with eight counts of mail fraud.
In 1998, McLain became a registered user of eBay.com, the online auction site, and posted and sold various items. At first, McLain posted low-priced collectibles and delivered them to the highest bidder, which caused eBay users to post favorable reviews about him as a seller. Once he had those favorable reviews, McLain then turned to posting expensive equipment, such as laptop computers and digital cameras. McLain allegedly accepted payment but never delivered the goods.
McLain is alleged to have defrauded more than 30 victims out of at least $36,000. McLain is current being held in San Diego by state authorities on unrelated charges. If he is convicted of all eight counts in the federal indictment, McLain faces a maximum penalty of 40 years in federal prison.
In the second case announced today, John Allen Nobles Jr., 31, of Whittier, was indicted last Friday on charges of defrauding more than 130 victims who were users of eBay. A federal grand jury in Los Angeles charged Nobles with nine counts of mail fraud in a case that allegedly resulted in losses of more than $10,000.
According to the indictment, from March 1999 through December 1999, Nobles used false names to register with eBay, and then he posted fraudulent auction listings in which he offered to sell golf clubs, beanie babies, Pokemon paraphernalia and other products. After the auctions closed, Nobles contacted the winning bidders via e-mail and instructed them to mail a check or money order for the amount of their bid, sometimes charging additional money for "shipping and handling." Victims were instructed to mail payment to "mail drops" that he rented.
Nobles cashed the checks and money orders sent by the winning bidders, but either never delivered the merchandise promised or delivered merchandise that was materially different from what had been ordered.
In addition to the more than $10,000 he fraudulently obtained from individual bidders, Nobles is accused of failing to pay eBay over $60,000 he owed in auction fees and expenses. If convicted of all nine counts in the indictment, Nobles faces a maximum possible penalty of 45 years in federal prison.
The third case involves three defendants who advertised high-end electronics and consumer goods for sale on Yahoo!Auctions. The trio offered Rolex watches, BOSE speaker systems, and Sony VAIO laptop computers to victims who were told to send their money to a "penthouse" suite on Valley Boulevard in Alhambra. The penthouse was in fact a "Ship and Mail" center.
The three indicted by a federal grand jury lat Thursday are Amy Liang, 22; her brother, Alan Liang, 21; and Benson Ip, 21. The Liangs were residents of Arcadia, but they are currently fugitives being sought by federal authorities. Ip also lives in Arcadia and was a student at Pasadena City College at the time of the alleged criminal conduct.
All three defendants in this case are charged with five counts of mail fraud and eight counts of wire fraud.
The Liangs and Ip convinced about 20 people to send approximately $65,000. The victims included people from as far away as England and the Palestinian Authority. After receiving the money, the defendants generally sent nothing, although some victims did receive a box of Godiva chocolates.
Ip will be summoned by the court to appear for an arraignment at a future date. The 13 charges in the indictment carry a potential penalty of 65 years in prison.
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