Four men charged in computerized online ticket scam

Group is accused of operating a network of computers that bought up the best seats at events and re-sold them, allegedly making more than $25 million in profits.

Four men accused of using a network of computers and automated software to buy up online tickets to concerts and sporting events and selling them at a profit were indicted on fraud, conspiracy, and computer hacking charges, federal prosecutors said on Monday.

They allegedly made more than $25 million by re-selling more than 1.5 million of the "most coveted tickets" to performances by Bruce Springsteen, Hannah Montana, Bon Jovi, Barbara Streisand, and Billy Joel; shows including Wicked and The Producers; sporting events such as the 2006 Rose Bowl and 2007 Major League Baseball playoff games at Yankee Stadium; and tapings of the TV show Dancing with the Stars, according to the indictment (PDF), which was unsealed on Monday.

Charged in the indictment are Kenneth Lowson, 40; Kristofer Kirsch, 37; Faisal Nahdi, 36, all of Los Angeles; and Joel Stevenson, 37, of Alameda, Calif. All of them surrendered Monday morning at FBI headquarters in Newark, N.J., except for Nahdi, who is not in the United States, prosecutors said.

Operating as Wiseguy Tickets, the men allegedly targeted Ticketmaster, Tickets.com, MLB.com, MusicToday, and other online ticket vendors. They are accused of hiring programmers in Bulgaria to create a nationwide network of computers that impersonated individual visitors to the ticket vendor sites, flooding the sites at the exact moment that the tickets went on sale.

The network of computers, dubbed Captcha bots, automated and sped up the buying process by completing Captcha tests the sites presented that were designed to keep automated bots off the sites.

The men also are accused of creating shell corporations with fake domains and e-mail addresses and aliases to deceive the online ticket vendors.

The men allegedly operated the enterprise between 2002 and 2009. They are accused of purchasing more than 11,000 tickets to Bruce Springsteen shows alone during three months in 2007. In 2005, they allegedly bought more than 800 of the 1,000 tickets released for the Rose Bowl, according to the indictment.

"For a single July 2008 concert featuring Bruce Springsteen and the E Street Band at Giants Stadium, Wiseguys was able to purchase and control nearly half of the 440 general admission floor tickets made available to the public for that concert--the tickets closest to the stage," prosecutors said in a news release (PDF). "In internal company reports, Wiseguys employees described their success at buying tickets as 'straight domination,' having bought the 'best ringsides by far,' and, for a January 2009 NFL playoff game at Giants Stadium between the Philadelphia Eagles and the New York Giants, having 'pigged out' on tickets."

The men face up to five years in prison on a conspiracy charge and up to 20 years on each of 42 counts of wire fraud. Lowson, Kirsch, and Stevenson also face up to 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 a 10-year prison sentence for each of six counts charging damage to computers in interstate commerce. In addition, each defendant faces a fine of $250,000 per count of conviction.

 

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