By David McGuire
washingtonpost.com Staff Writer Tuesday, July 30, 2002; 2:35 PM
The 12-year prison sentences doled out to a pair of online con
artists caught in a multi-agency Internet fraud sweep should serve as
a warning that virtual scammers can spend a long time in real jail
cells, federal authorities said today.
"Prosecutors are willing to do these cases and seek significant jail
time," Steve Baker, the director of the Federal Trade Commission's
Midwest bureau said today. "Five or six years ago I don't think that
was the case."
The 12-year jail terms, handed down by a Missouri circuit court to
residents Phillip Chapman and Amanda Warren, could be the longest
sentences ever issued for Internet fraud, FTC attorney and online
auction expert Delores Thompson said today.
"I can't recall such a lengthy sentence," Thompson said, adding that
the Missouri criminal crackdown wouldn't be the last. Warren and
Chapman got five years for writing bad checks and seven years for
theft charges related to Internet auction fraud.
Chapman and Warren would offer big ticket items -- like laptops
and baseball cards -- for sale on auction sites run by eBay and
Yahoo. When consumers paid for the items, the pair took the money
didn't send the goods, according to Missouri authorities.
Online auction fraud accounts for by far the largest number of
Internet-related complaints that the FTC receives, Thompson said.
The Missouri case was one of 19 civil and criminal law enforcement
actions filed in a cross-border sweep of Internet scams. The FTC,
Postal Inspection Service, Commodity Futures Trading Commission and
Securities and Exchange Commission coordinated with 10 state
attorneys general and 11 other state and local law enforcement groups
in the cases.
Although the sweep focused on scams operated out of the Midwest, the
actions announced today involved criminals who bilked Internet users
across the country out of millions of dollars, according to the
agencies.
Baker said other multi-agency "Netforce" coalitions would conduct
similar operations in different regions of the country. He also said
that the Midwest sweep would generate at least 19 more civil and
criminal actions within the next few months.
Efforts to educate state, local and federal authorities about
Internet fraud are now paying dividends because a more prosecutors
are willing to file criminal cases against online scammers, Baker
said.
"It is nice to see that more and more law enforcement personnel are
comfortable bringing this cases," Thompson added. "What is noteworthy
to me here is that there are adequate laws on the books to address
this kind of fraud."
Thompson said the convictions and other actions announced today
should dispel the notion, held by some scammers, that Internet fraud
exists in a legal no man's land, where prosecution is difficult, if
not impossible.
One of the other major actions in the sweep was against an online
scam -- dubbed "Stuffing for Cash" -- in which consumers were
promised $2 for every envelope they could stuff with a sales letter.
Consumers paid $40 to participate in the privilege of participating
in the program, and received no materials and no money, authorities
said.
The authors of that scam collected $2 million from consumers in the
last year alone, according to the FTC. At the commission's request, a
federal district court has frozen those defendants' assets, pending
trial.
