4 Charged in $25M Ticket Scalping Scheme

Federal prosecutors say four men fraudulently obtained more than a million tickets to concerts and sporting events in Philadelphia and various other cities by hacking into Ticketmaster.com and other Web sites.

Authorities in Newark, N.J., charged 40-year-old Kenneth Lowson, 37-year-old Kristofer Kirsch, 36-year-old Faisal Nahdi and 37-year-old Joel Stevenson, all of California, on Monday.

The indictment charges the men with multiple wire fraud counts and gaining unauthorized access to computer systems, including Ticketmaster.com, Tickets.com, MLB.com, and MusicToday.com, according to U.S. Attorney Paul J. Fishman’s press release.

Prosecutors say the trio's company, Wiseguy Tickets, allegedly devised computer programs that impersonated individual ticket buyers to bombard ticket Web sites. The programs were able to bypass safeguards meant to restrict the number of tickets each customer can buy, such as CAPTCHA – the computer program that requires ticket purchasers to read and type distorted images of letter, number and characters.

Wiseguy Tickets worked with computer programmers in Bulgaria to override CAPTCHA and flood online ticket vendors at the exact moment that event tickets went on sale, according to Fishman.

“The public thought it had a fair shot at getting tickets to these events, but what the public didn’t know was that the defendants had cheated them out of that opportunity,” said Fishman.

The company allegedly made more than $25 million by reselling the tickets to such concerts as Bruce Springsteen, Hannah Montana, Bon Jovi, Barbra Streisand, Billy Joel and Kenny Chesney – many of whom performed in greater Philadelphia area venues.
      
The criminal scheme also targeted tickets to live theater, including productions of Wicked and The Producers; sporting events, including the 2006 Rose Bowl and 2007 Major League Baseball playoff games at Yankee Stadium; and special events, including tapings of the television show Dancing with the Stars.   

The events in question took place in Philadelphia, Newark and East Rutherford, New Jersey, and across the United States, including in New York City, Anaheim, Chicago, Houston, Los Angeles, Omaha, Pittsburgh and Tampa.

The men of Wiseguy Tickets, Inc. surrendered to federal authorities Monday morning. If convicted, each man faces a maximum of 20 years in prison on each wire fraud charge, and maximum of five years in prison on the conspiracy charges.

“At a time when the Internet has brought convenience and fairness to the ticket marketplace, these defendants gamed the system with a sophisticated fraud operation that generated over $25 million in illicit profits.” said U.S. Attorney Fishman. “Today’s indictment represents a significant step forward in the fight against those who use fraud to disrupt E-Commerce and evade computer security.”