Lawyer: NJ ticket scam defendants didn't break law

[October 23, 2010]  NEWARK, N.J. (AP) -- The upcoming trial of four California men accused of illegally buying more than a million sports and concert tickets online could set new rules for prosecuting computer fraud if it's allowed to proceed, an attorney for one of the men argued in federal court Monday.

Or not, according to federal prosecutors, who characterized the case as a garden variety fraud.

"We see cases like this in federal court all the time," Assistant U.S. Attorney Erez Lieberman said during a motion hearing before U.S. District Judge Katherine Hayden.

Lieberman said the defendants "lied, lied and lied some more" when they purchased tickets using hundreds of fake Internet domain names and created a method of bypassing safeguards meant to limit the number of tickets available to individual buyers.

"Each and every step of the way it was a traditional fraud," Lieberman said.

The judge heard arguments on the defense's motion to dismiss the indictment on the grounds that federal law doesn't cover what defense attorney Mark Rush, representing defendant Kenneth Lowson, said were merely violations of the terms of use on Internet sites including Ticketmaster.com.

According to a 43-count indictment unsealed in March, the four men and their company, Wiseguy Tickets Inc., used a nationwide network of computers to flood sites such as Ticketmaster and Major League Baseball and developed a program that could automatically get past Web pages that require purchasers to manually type in sample words before they can proceed.

The group focused on highly coveted premium tickets to high-profile events such as concerts by Bruce Springsteen, Bon Jovi, Dave Matthews and Hannah Montana and sporting events such as the baseball playoffs, the 2009 Sugar Bowl and the 2007 BCS college football championship game, federal authorities said. Prosecutors have estimated their profit at $29 million.

The case is being prosecuted in New Jersey because many of the events were held at Giants Stadium, Izod Center and Prudential Center; others were spread across the country at venues in New York City, Chicago, Houston, Los Angeles, Philadelphia, Pittsburgh and Tampa, Fla., according to the indictment.

Lowson, Kristofer Kirsch and Faisal Nahdi, all of Los Angeles, and Joel Stevenson, of Alameda, Calif., face charges that include conspiracy, wire fraud and unauthorized computer access. The wire fraud counts are the most serious and carry a maximum prison sentence of 20 years per count upon conviction. Lowson, Kirsch and Stevenson have been free on bail since their arrests, while Nahdi is a fugitive and is believed to be overseas.

On Monday, Rush argued that while the defendants' actions may be deemed unsavory they didn't rise to the level of criminal activity but should more appropriately be taken up as a civil matter.

"This isn't Ticketmaster versus Wiseguy, but perhaps it should be," he said. "But it shouldn't be the United States of America versus Wiseguy. Congress has not criminalized ticket brokers or ticket scalpers.

"What if they hired 100,000 people to all get on the site at the same time -- would we be here?" he asked. "Or was it because it was a computer? If we are struggling to figure out if this is a violation of federal criminal law, then the indictment should be dismissed."

[Associated Press; By DAVID PORTER]

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