FBI Investigates Shill Bidding on EBay

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The FBI is investigating several eBay users for shill bidding, according to a report in The New York Times yesterday.

EBay, Santa Clara, CA, would not comment directly on the case but said it is cooperating with investigators who began looking into false bidding on the Web site after the much publicized Kenneth A. Walton incident.

Walton, a Sacramento lawyer, bid on a painting he put up for auction that was rumored to be by artist Richard Diebenkorn.

EBay eventually suspended the auction and permanently stripped Walton of his eBay privileges. According to the report, Walton is also under suspicion for acting with others to bid up the price of other auctions. He has denied those charges.

Participation in false bidding, or shill bidding, violates federal statutes against mail and wire fraud. Offenses carry the maximum penalty of up to five years in prison and $1 million in fines.

EBay also suspended eight Internet names and disciplined 15 names all together since the Walton incident, the report said.

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