Internet Con Artists Jailed In Federal Fraud Sweep - Phillip Chapman and Amanda Warren

Byline: David McGuire

The 12-year prison sentences doled out to a pair of online con artists caught in a multi-agency Internet fraud sweep should serve as a warning that virtual scammers can spend a long time in real jail cells, federal authorities said today.

"Prosecutors are willing to do these cases and seek significant jail time," Steve Baker, the director of the Federal Trade Commission's Midwest bureau said today. "Five or six years ago I don't think that was the case."

The 12-year jail terms, handed down by a Missouri circuit court to residents Phillip Chapman and Amanda Warren, could be the longest sentences ever issued for Internet fraud, FTC attorney and online auction expert Delores Thompson said today.

"I can't recall such a lengthy sentence," Thompson said, adding that the Missouri criminal crackdown wouldn't be the last. Warren and Chapman got five years for writing bad checks and seven years for theft charges related to Internet auction fraud.

Chapman and Warren would offer big ticket items -- like laptops and baseball cards -- for sale on auction sites run by eBay and Yahoo. When consumers paid for the items, the pair took the money didn't send the goods, according to Missouri authorities.

Online auction fraud accounts for by far the largest number of Internet-related complaints that the FTC receives, Thompson said.

The Missouri case was one of 19 civil and criminal law enforcement actions filed in a cross-border sweep of Internet scams. The FTC, Postal Inspection Service, Commodity Futures Trading Commission and Securities and Exchange Commission coordinated with 10 state attorneys general and 11 other state and local law enforcement groups in the cases.

Although the sweep focused on scams operated out of the Midwest, the actions announced today involved criminals who bilked Internet users across the country out of millions of dollars, according to the agencies.

Baker said other multi-agency "Netforce" coalitions would conduct similar operations in different regions of the country. He also said that the Midwest sweep would generate at least 19 more civil and criminal actions within the next few months.

Efforts to educate state, local and federal authorities about Internet fraud are now paying dividends because a more prosecutors are willing to file criminal cases against online scammers, Baker said.

"It is nice to see that more and more law enforcement personnel are comfortable bringing this cases," Thompson added. "What is noteworthy to me here is that there are adequate laws on the books to address this kind of fraud."

Thompson said the convictions and other actions announced today should dispel the notion, held by some scammers, that Internet fraud exists in a legal no man's land, where prosecution is difficult, if not impossible.

One of the other major actions in the sweep was against an online scam -- dubbed "Stuffing for Cash" -- in which consumers were promised $2 for every envelope they could stuff with a sales letter. Consumers paid $40 to participate in the privilege of participating in the program, and received no materials and no money, authorities said.

The authors of that scam collected $2 million from consumers in the last year alone, according to the FTC. At the commission's request, a federal district court has frozen those defendants' assets, pending trial.

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