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Online scams now Federal crime

Putting coins up for an Internet auction without the intent of delivering the described merchandise to the winning bidder, and then keeping the money besides, is now provably a federal crime.

In a United States District Court for  the Western District of Wisconsin, a conviction on those charges has just been sustained by the United States Court of Appeals for the 7th Circuit, in a decision handed down June 22.

Judgment of conviction and sentence was entered on Oct. 12, 2007 The case was argued a year ago and decided last week.

United States of America vs Jeffrey Heckel, and in the appellate court’s summary, they said this: “Beginning in March 2002, Jeffrey Heckel used two Internet auction Web sites to defraud successful bidders on items he had listed for sale.”

As the Court explained it, “The scheme was simple: He would list an item for auction, accept the highest bid, cash the check sent to him by the winning bidder, and ship a product far inferior to the one advertised on the Web site. Heckel’s fraud netted him in excess of $15,000.”

His appellate brief to the 7th Circuit Court of Appeals in Chicago detailed the r scheme: from “April 1, 2002, through May 8, 2003, Jeffrey Heckel used the ebay.com and yahoo.com online auction sites to fraudulently post five items up for bid…”

The brief from Heckel’s lawyers continues: “Heckel pled guilty to count five of the indictment, admitting that he had posted a picture of a rare coin and instructed a bidder to the auction to send a $3,000 check to him via the U.S. mail. The coin that he sent to the bidder was not the coin that was pictured and was worth much less than $3,000.”

Because Heckel pled guilty to at least one count, the appeal focused on sentencing, which was 30 months in prison plus three years of supervised release.

The motif of the crime was to offer a “coin for sale on the Internet, as Heckel did in the count to which he pled guilty, [by which he] invited the vast online public to bid.” The court noted that “those who did so were trying to purchase the item by suggesting a price that they believed no competing online bidder would exceed.”

Heckel evidently asked for mitigation on the ground that not many people were injured, but the 7th Circuit would have none of that. “That only one such bidder eventually won the online auction does not negate the harm of this method of fraudulent solicitation,” its opinion said.

Heckel “first argues that the [U.S.] district court incorrectly calculated his offense level because the court added two levels for use of ‘mass-marketing.’ … The commentary to this [sentencing] guideline explains that ‘mass-marketing’ includes ‘a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to … purchase goods or services.’

“Because the auction Web sites Heckel used were accessible to the general public and Heckel attempted to increase the price of the items posted by soliciting a large number of bids over the Internet, the district court applied the enhancement,” which view the court of appeals upheld.

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