Man pleads guilty in Ebay coin fraud
Michigan
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A Madison man who sold coins on eBay for several years until he suffered losses in commodity trading and gambling pleaded guilty Wednesday in federal court in connection with defrauding customers of $171,000.
Between May 1 and Dec. 29, 2006, John E. Paul took payment from 24 customers for collectible coins he auctioned on eBay's Web site without sending them their merchandise.
Paul, 51, had been a successful coin seller on eBay, listing coins under the registered name "badgerbay." But by 2006, eBay began receiving numerous complaints about "badgerbay" not shipping purchased items and being nonresponsive to inquiries, Assistant U.S. Attorney Grant Johnson said.
As a result, eBay forwarded Paul's address to local authorities, who executed a search warrant and found correspondence from various victimized customers and the computer Paul used to place items on eBay auctions, Johnson said.
The computer also revealed that "substantial sums of money" were spent on an offshore gambling Web site and on commodities trading, Johnson said.
When District Judge Barbara Crabb asked Paul to explain what he had done, he said he had sold "quite a volume of coins" over the years on eBay but was pre-selling coins for delivery in the future, when the market changed and he lost money. He tried to make up for his losses by trading on the silver commodities market, but he also lost money on that.
Paul said he was filling some orders in 2006, but couldn't cover them all, when the authorities shut him down.
Crabb accepted Paul's guilty plea to wire fraud and set sentencing for Dec. 5, when he faces maximum statutory penalties of 20 years in prison, a $250,000 fine and restitution.
Between May 1 and Dec. 29, 2006, John E. Paul took payment from 24 customers for collectible coins he auctioned on eBay's Web site without sending them their merchandise.
Paul, 51, had been a successful coin seller on eBay, listing coins under the registered name "badgerbay." But by 2006, eBay began receiving numerous complaints about "badgerbay" not shipping purchased items and being nonresponsive to inquiries, Assistant U.S. Attorney Grant Johnson said.
As a result, eBay forwarded Paul's address to local authorities, who executed a search warrant and found correspondence from various victimized customers and the computer Paul used to place items on eBay auctions, Johnson said.
The computer also revealed that "substantial sums of money" were spent on an offshore gambling Web site and on commodities trading, Johnson said.
When District Judge Barbara Crabb asked Paul to explain what he had done, he said he had sold "quite a volume of coins" over the years on eBay but was pre-selling coins for delivery in the future, when the market changed and he lost money. He tried to make up for his losses by trading on the silver commodities market, but he also lost money on that.
Paul said he was filling some orders in 2006, but couldn't cover them all, when the authorities shut him down.
Crabb accepted Paul's guilty plea to wire fraud and set sentencing for Dec. 5, when he faces maximum statutory penalties of 20 years in prison, a $250,000 fine and restitution.
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