Serial ticket scammers indicted on 43 counts
The US Department of Justice (DoJ) has indicted four individuals who allegedly made more than $25 million by fraudulently acquiring and reselling over 1.5 million entertainment tickets.
The extensive, 43-count indictment describes a nefarious scheme in which the defendants and their company, Wiseguy Tickets, Inc. (Wiseguys), targeted Ticketmaster, Tickets.com, MLB.com, MusicToday and other online ticket vendors.
Indeed, the defendants are alleged to have fraudulently obtained prime tickets to performances by Bruce Springsteen, Hannah Montana, Bon Jovi, Barbara Streisand, Billy Joel and Kenny Chesney.
The criminal scheme also targeted tickets to live theater, such as productions of Wicked and The Producers; sporting events, including the 2006 Rose Bowl and 2007 Major League Baseball playoff games at Yankee Stadium; and special events like Dancing with the Stars.
According to the indictment, the Wiseguys typically sold event tickets to brokers, who offloaded them to the general public at significantly higher prices. Wiseguys profited by charging the brokers a percentage mark-up over the face value of the tickets it fraudulently obtained and re-sold.
Unsurprisingly, online vendors were unwilling to sell tickets in large quantities for commercial resale to the Wiseguys or other brokers. As such, vendors restricted access to their ticket purchasing system to individual users with software designed to prevent automated programs from accessing their service.
These "protecting technologies" included audio and visual CAPTCHA - a computer "challenge" that required would-be ticket purchasers to correctly decipher distorted images of letters, numbers and characters before ticket sales were authorized.
Undaunted, the Wiseguys worked with computer programmers in Bulgaria to establish a nationwide network of computers that impersonated individual visitors to the online vendors' websites.
The network - described as the "CAPTCHA Bots" in the indictment - allowed the Wiseguys to flood the vendors' computers at the exact moment that event tickets went on sale.
In addition, the CAPTCHA Bots automated and optimized the purchase process by automatically completing both CAPTCHA and audio CAPTCHA challenges.
The accused also allegedly used aliases, shell corporations and fraudulent misrepresentations, both to deploy the CAPTCHA Bots and to disguise their ticket-purchasing activities.
Finally, the Wiseguys created and managed hundreds of fake Internet domains (e.g., stupidcellphone.com) and thousands of e-mail addresses to receive event tickets from online ticket vendors.
If convicted, each defendant faces a maximum statutory penalty of five years in prison on the conspiracy charge and a maximum statutory penalty of 20 years in prison on each wire fraud charge.
It should also be noted that defendants Kenneth Lowson (Wiseguys owner), Kristofer Kirsch (Wiseguys owner), and Joel Stevenson (US-based programmer) face statutory maximum penalties of five years in prison and a $250,000 fine on each of 19 counts charging gaining unauthorized access and exceeding authorized access to computers; and 10 years in prison for each of six counts charging damage to computers in interstate commerce.