EcommerceBytes-NewsFlash, Number 481 - February 11, 2003 
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New Developments in eBay 'Diebenkorn' Fraud Case
By Ina Steiner
Nearly 2 years after he was indicted by a federal grand jury in Sacramento, Kenneth Fetterman was arrested in Wichita, Kansas, on January 11, 2003, for his alleged role in a shill bidding ring accused of auctioning fake artwork on eBay.
On March 8, 2001, a federal grand jury in Sacramento returned an indictment against Fetterman and two co-defendents, charging them with participating in a scheme to fraudulently bid on hundreds of art auctions on eBay, including one in which an eBay user was induced to bid over $135,805 for a fake Richard Diebenkorn painting. The indictment alleges that the defendants created more than 40 User IDs on eBay using false registration information, and then used those aliases to place fraudulent bids to artificially inflate the prices of literally hundreds of paintings they auctioned on eBay from November 1998 to June 2000.
Kenneth A. Walton and Scott Beach pled guilty on April 17, 2001, to one count of wire fraud and three counts of mail fraud. Kenneth Walton is a former attorney who claims to have co-founded HammerTap, a software company based in Orangevale, California, that develops and sells online auction-related software for eBay users. HammerTap is a well-respected company in the industry and recently announced a licensing deal with an eBay-backed auction software vendor.
Andrew Walton, Kenneth Walton's brother, is president of HammerTap. He said Kenneth has occasionally assisted with answering customer emails, but does not help run the company in any way. Kenneth has a full-time job at another company, according to Andrew.
Kenneth Walton and Scott Beach face sentencing on April 8, 2003. Kenneth Fetterman could face extradition to California.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.
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