Defendants Were Serial Identity Thieves
A federal district court has shut down two defendants who used stolen identities to sell nonexistent goods in online auctions, making it appear that innocent third parties were guilty of fraud. The defendants have been permanently barred from participating in Internet auctions, making false claims about having and being able to deliver merchandise to consumers, and misusing consumers’ personal information. Since the Federal Trade Commission sued them in April 2003, James D. Thompson and Susan B. Germek have been indicted for mail fraud by the U.S. Attorney’s Office in the Northern District of Illinois stemming from their Internet auction operation. Germek pled guilty on one count of mail fraud and is awaiting sentencing; no trial date has been set for Thompson.
According to the FTC, since early 1999, the defendants opened numerous accounts on Internet auction Web sites, offering various items of merchandise for sale, including computer software and electronics. The defendants allegedly accepted payment from consumers, then failed to deliver the promised merchandise. The FTC alleged that the defendants constantly changed their Internet auction account names to conceal the fact that they were defrauding consumers.
In 2001, the defendants allegedly embarked on serial identity theft, setting up bank accounts and post office boxes in other people’s names, and directing that payment be sent to them. As a result, the FTC alleged, consumers and law enforcers both believed that the identity theft victims were responsible for the auction fraud. According to the FTC, the identity theft victims were people with whom Thompson had personal relationships, people whose identity information Germek had taken from the records of a suburban Chicago hotel, and even a person who had died.
The default judgment entered against Thompson permanently bars him from participating in Internet auctions; making misrepresentations about any product or service for sale on the Internet, including any violations of the FTC’s Mail Order Rule; using consumers’ personal information without their authorization; and selling or otherwise disclosing consumers’ personal or financial information. The court has ordered Thompson to pay $88,056.18 in consumer redress. The stipulated final judgment against Germek, who agreed to settle the charges against her, contains the same conduct provisions. Under the settlement agreement, Germek provided $5,713.59 to be used for consumer redress, and agreed to a suspended judgment ordering her to pay $41,186.94 if she is found to have misrepresented her financial situation. Both judgments also contain standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.
The Commission vote to authorize staff to file the stipulated final order against Germek was 5-0. The stipulated final order for permanent injunction was entered by the U.S. District Court for the Northern District of Illinois, Eastern Division, on August 22, 2003.
NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
Copies of the default judgment and stipulated final judgment are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(Civ. No. 03 C 2541)
(FTC File No. X03 0042)
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