Ebay art fraud brings 46 months in jail

SACRAMENTO, May 26 (UPI) -- A California man convicted in the first Internet fraud prosecution based on "shill" bidding faces 46 months in federal prison.

The online auction site eBay first became suspicious in 2000 when Kenneth Fetterman offered a painting purported to be by Richard Diebenkorn, whose works have sold for millions of dollars. eBay's investigation uncovered several users coordinating their bidding for the same items to inflate the paintings' prices, known as "shill" bidding. One bidder eventually paid $135,805 for a fake Diebenkorn, the Sacramento Bee reported.

At his sentencing Tuesday in Sacramento, Assistant U.S. Attorney Patrick Hanly said, "Fetterman's conduct was egregious, in that he defrauded several people out of large sums of money. One victim ... cashed out his 401(k) plan to buy one of Fetterman's paintings. Moreover, Fetterman's fraud scheme undermined the public's confidence in the eBay trading system."

"I deeply regret the deceitful actions that have brought me here today," Fetterman said. "I apologize to the victims, and I detest the person I was."

Fetterman also proffered fakes of William Wendt, Percy Gray, Alberto Giacometti, Clyfford Still and Maurice Utrillo. He has already served 16 months behind bars.

eBay has since developed new software to detect shill bidding as it occurs, instead of after the transaction is completed.