Book Review: Fake: Forgery, Lies, & eBay
By Ina Steiner
Ken Walton created some groundbreaking tools for eBay sellers in 2001. Walton also perpetrated the most notorious art fraud in eBay's history involving forgery and shill-bidding with cohorts Ken Fetterman and Scott Beach.
However, Walton kept secret the full extent of his deception regarding his eBay software company, and his not quite "tell-all" book released this month merely glosses over subterfuge relating to HammerTap.
In his new book, "Fake: Forgery, Lies, & eBay. How one man's con game created an international scandal & triggered a nationwide FBI manhunt," Walton details the slippery slope that led him from shill bidding as an "advertising strategy" on eBay to passing off forged paintings as real ones as part of a shill-bidding ring.
Throughout the book, Walton - a practicing attorney at the time- acknowledges the harm he caused through his actions, while at the same time justifying his behavior with excuses like, "everyone was doing it," and pointing to the greed of some of his victims. One of his eBay buyers, Kevin Moran, borrowed money from his 401k retirement plan to pay for a $30,000 piece of artwork that Walton believed his cohort had forged. "I soothed my conscience by telling myself that his portfolio must have been bloated by technology stocks, and he could afford it."
Walton also reveals that he failed to pay taxes on the income he had earned from eBay sales in 1999, an amazing lapse for an attorney.
Walton does not paint a flattering picture of Ken Fetterman, the man Walton says introduced him to selling art on eBay. Walton portrays Fetterman as a twitching, spittle-spewing, paranoid hothead and views socializing with him as an unpleasant cost of doing business. "When Fetterman and I were out, his behavior often made my skin crawl," Walton wrote. Fetterman is currently serving a 46-month prison sentence for his part in the eBay fraud. Walton and Scott Beach served no prison time in return for their plea agreements.
The first few chapters are the best and are bound to be interesting to those eBay sellers who have experienced the "thrill of the hunt" when looking for treasures to sell on the auction site. In the middle of the book, Walton details the sometimes-bumbling actions that led to his demise on eBay and the eventual investigation by the FBI into a painting he forged to look like a Diebenkorn.
Also fascinating is Walton's admission on p. 262 that he was "the wizard behind the curtain" of HammerTap, a company that developed software tools for eBay users. Walton was disbarred over his felony plea and was forced to find a new career. He turned to software programming with the help of his brothers Matt and Keith. He created and marketed several eBay tools in 2001, and in April 2002, launched DeepAnalysis, a groundbreaking tool that lent transparency to the eBay marketplace for the first time.
In 2003, when AuctionBytes contacted HammerTap about a possible connection to Ken Walton, Andrew Walton admitted Ken had a limited involvement with the company. In an article published on February 11, 2003, AuctionBytes wrote:
"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." (http://auctionbytes.com/cab/abn/y03/m02/i11/s03).
But with the publication of "Fake," AuctionBytes has learned there never was an "Andrew Walton." Ken Walton explains in the book that he used the name Andrew Walton when dealing with journalists. In fact, AuctionBytes spoke many times with "Andrew Walton" in 2002 and published eBay data using HammerTap's DeepAnalysis throughout that year.
No other reporter picked up on the Ken Walton - HammerTap connection even after the February 2003 article in AuctionBytes, but eBay did, and they contacted the prosecutor in the case. Part of Walton's plea agreement with authorities was that he would not directly or indirectly participate in eBay auctions. His lawyer had told him in early 2001 to give up the eBay tools - "It just doesn't look good, and I don't like the fact that you're still lingering around eBay. Just drop them and make something else."
But Walton had not taken his attorney's advice. Luckily for him, the prosecutor was not concerned about his involvement in HammerTap, but eBay demanded that Walton stop selling the HammerTap DeepAnalysis tool.
Walton recounts his conversation in the Spring of 2003 with eBay lawyer Jay Monahan, who refers to the Diebenkorn fraud and shill-bidding scandal. "That incident was the second most embarrassing public relations event in the history of this company, after the website outage of 1999, and under no circumstances will we ever enter into any kind of business relationship with any company even remotely affiliated with you, or any member of your family." Walton says he was forced to sell HammerTap to another company, and the sale went through on October 31, 2003.
With the publication of the book, Walton has launched a blog, where there's an excerpt of the book (http://kennethwalton.com/excerpt.html) and photos (http://kennethwalton.com/bookphotos.html).
"Fake" is an interesting read, particularly for collectors, art-lovers and eBay buyers and sellers. However, one is left wondering what Walton might have left out of his tale.
You can find more information about the hardcover book priced at $21.95 on the publisher website (Simon Spotlight Entertainment).
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 firstname.lastname@example.org.
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