Wiseguys Get Probation

A judge in Newark, N.J., has refused to give prison time to a group of men who pleaded guilty last year in a case involving an Internet ticket-buying scheme that allegedly netted millions.

While Wiseguy Tickets owners Kenneth Lowson and Kristofer Kirsch could have faced several years in prison for conspiracy to commit wire fraud, U.S. District Judge Katharine Hayden said in her ruling June 9 that probation was a just sentence in the complex case, according to the local Star-Ledger.

“I cannot get away from the fact that we are talking about e-commerce,” Hayden said. “I don’t think any one of these defendants believes the business practices that they engaged in are safe any more.”

In addition to two years probation, Lowson and Kirsch each received 300 hours of community service and Lowson was ordered to forfeit $1.2 million. Wiseguy chief programmer Joel Stevenson, who’d pleaded guilty to a misdemeanor charge of unauthorized access to computers engaged in interstate commerce, was sentenced to one year of probation.

During court proceedings, U.S. Attorney Erez Liebermann argued that Wiseguys was run by men who “lie, lie, lie” and who engaged in computer-assisted “subterfuge” to make millions, the Star-Ledger reported.

Specifically, the government alleged the men had worked with programmers in Bulgaria to create a network of computers to flood ticket sites’ computers during onsales, using bots to speed through CAPTCHA challenges. Because of this, Wiseguys was able to secure approximately 1.5 million high-demand event tickets, which were then typically resold to brokers at marked-up prices.

To conceal their identity, the men also reportedly established a network of computers in the U.S. that impersonated individual visits to the sites of companies including Ticketmaster, Live Nation and Tickets.com.

Attorneys for the Wiseguys argued during the case that the scheme wasn’t criminal; the men had simply invented a better mousetrap to score tickets.

Hayden explained in her ruling that the world of e-commerce law is still very new and very complicated. She noted that while selling tickets on the secondary market is legal, the men deserved punishment for their “underhanded” actions, the paper said.

“All of this is bound up in the state of the law that is very gray,” Hayden said. “And we’re talking now about three people who have accepted responsibility for using a deceptive practice.”