Three of the four defendants in the federal Wiseguy Tickets cyber crimes case pleaded guilty Thursday in U.S. District Court in New Jersey to various fraud charges. The fourth suspect remains at large.
California residents Kenneth Lowson, 41, and Kristofer Kirsch, 37, pleaded guilty to conspiracy to commit wire fraud and exceed authorized access to computers engaged in interstate commerce. Joel Stevenson, also 37, pleaded guilty to exceeding authorized access to computers engaged in interstate commerce. The guilty pleas were lodged before Judge Katherine S. Hayden. Co-conspirator Faisal Nahdi, who fled the country prior to the March 2010 indictments, has never appeared in court to answer the charges.
The group will be sentenced on March 15, 2011, and could face fines in the hundreds of thousands of dollars and maximum jail time of one to five years. Lowson also surrendered $1.2 million in proceeds from the crime and computer equipment used to perpetrate the deeds.
“These defendants made money by combining age-old fraud with new-age computer hacking,” U.S. Attorney Paul Fishman said in a statement. The four operated under the company name Wiseguy Tickets. “Their guilty pleas confirm that no matter what they called their activities, they were criminal violations of federal law.”
According to Fishman, the defendants targeted Ticketmaster, Live Nation, Tickets.com, Telecharge, MLB.com and MusicToday over several years in a scheme to circumvent online security protocols to obtain thousands of premium tickets to sporting events, such as baseball and NFL games and the Rose Bowl; theatrical productions, such as “Wicked” and “The Producers;” and concert tickets to a host of artists, such as Bruce Springsteen, Kenny Chesney, Bon Jovi, Miley Cyrus and Barbra Streisand.
The Wiseguys used “bot” software, which surreptitiously worms its way past online firewalls and protections, and false identities and other fraudulent means to procure the tickets. The tickets were paid for, but they were able to secure thousands, which they resold to ticket brokers at a profit, who in turn resold them to fans. The Wiseguys are believed to made more than $25 million over the course of the scheme.
“In a free market society, safeguards must be present to ensure a fair and honest marketplace for consumers. The cyber manipulation of this fair and honest system must be closely monitored to protect the general public, whether it involves stock trading, on-line banking, or the purchase of tickets to concerts or sporting events,” Michael B. Ward, Special Agent in Charge of the FBI’s Newark Division, said in a statement.
Pittsburgh, PA attorney Mark Rush, who represented Lowson and was the unofficial spokesperson for the Wiseguys, did not immediately respond to a message seeking comment. Outside of court Thursday, Rush reportedly reiterated his defense that his client and the others did not commit federal crimes.
“They sold tickets to a public that craves tickets,” he said, adding that the brokers the defendants also sold tickets to were unable to obtain them from Ticketmaster and the other vendors.
Several Internet advocacy groups and legal experts wrote to the court in support of the defendants’ unsuccessful attempt to have the case dismissed. They argued that the defendants had essentially figured out a better way to obtain tickets, but had not committed a crime.