A federal district court has shut down two defendants who used stolen identities to sell nonexistent goods in online auctions, making it appear that innocent third parties were guilty of fraud. The defendants have been permanently barred from participating in Internet auctions, making false claims about having and being able to deliver merchandise to consumers, and misusing consumers’ personal information.

J. D. Thompson and S. B. Germek have been indicted for mail fraud by the U.S. Attorney’s Office in the Northern District of Illinois stemming from their Internet auction operation. Germek pled guilty on one count of mail fraud and is awaiting sentencing; no trial date has been set for Thompson.

False Internet Information

Since early 1999, according to the government, the defendants opened numerous accounts on Internet auction Web sites, offering various items of merchandise for sale, including computer software. They accepted payment from consumers, but failed to deliver the promised merchandise. The prosecutors claimed they constantly changed their Internet auction account names to conceal the fact that they were defrauding consumers.

In 2001, the defendants allegedly embarked on serial identity theft, setting up bank accounts and post office boxes in other people’s names, and directing that payment be sent to them. As a result, the Government alleged, consumers and law enforcers both believed that the identity theft victims were responsible for the auction fraud. The identity theft victims were people with whom Thompson had personal relationships, people whose identity information Germek had taken from the records of a suburban Chicago hotel, and even a person who had died.

Barred For Life and Other Penalties

The default judgment entered against Thompson permanently bars him from participating in Internet auctions; making misrepresentations about any product or service for sale on the Internet, including any violations of Mail Order Rule; using consumers’ personal information without their authorization; and selling or otherwise disclosing consumers’ personal or financial information.

The court has ordered Thompson to pay $88,056.18 in consumer redress. The stipulated final judgment against Germek, who agreed to settle the charges against her, contains the same conduct provisions. Under the settlement agreement, Germek provided $5,713.59 to be used for consumer redress, and agreed to a suspended judgment ordering her to pay $41,186.94 if she is found to have misrepresented her financial situation.