Online retailer eBay Inc. will have to pay a $3 million fine after the feds charged the California-headquartered company over its employees who sent live spiders, live cockroaches, and other disturbing items, to a Massachusetts couple over negative reviews.
According to court papers filed on Thursday (January 11), eBay was fined $3 million to resolve criminal charges over an August 2019 harassment and intimidation campaign — which was waged by employees against an older couple in retaliation over their online coverage of eBay — and for its obstruction of the investigation that followed.
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The Justice Department charged the online retailer with two counts of stalking through interstate travel, two counts of stalking through electronic communications services, one count of witness tampering, and one count of obstruction of justice.
Over three years ago, the employees behind the attack were already prosecuted for the extensive scheme to intimidate the Massachusetts couple, identified as David and Ina Steiner. It’s reported that the couple were behind an online newsletter called EcommerceBytes, which upset eBay executives with its coverage.
Per eBay’s admissions, between approximately August 5, 2019 and August 23, 2019, Jim Baugh, eBay’s former Senior Director of Safety and Security, and six other members of eBay’s security team targeted the Massachusetts couple. Senior executives at eBay were frustrated over their newsletter’s tone and content, and comments left on its articles.
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According to the U.S. Attorney’s Office in Massachusetts, in addition to the charges against eBay, the company has also entered into a deferred prosecution agreement, which could result in the charges against them being dismissed if they comply with certain conditions.
Under the terms of the agreement, eBay admitted to a detailed recitation of all the relevant facts about its conduct and agreed to pay a criminal penalty of $3 million, which is the statutory maximum fine for these six felony offenses.
Additionally, the company will be required to retain an independent corporate compliance monitor over three years and will have to make extensive enhancements to its compliance program.
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Speaking on the case, Acting United States Attorney Joshua S. Levy released a statement and said, “eBay engaged in absolutely horrific, criminal conduct. The company’s employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand.”
Levy added, “We left no stone unturned in our mission to hold accountable every individual who turned the victims’ world upside-down through a never-ending nightmare of menacing and criminal acts. The investigation led to felony convictions for seven individuals, all former eBay employees or contractors, and the ringleader was sentenced to 57 months in federal prison.”
He continued, “Today’s criminal resolution with the company imposes the maximum fine that the law allows under the statutes, holding eBay accountable for a corporate culture that led to this unprecedented stalking campaign. The corporate monitoring of eBay will be in place for the next three years and will ensure that eBay’s senior leadership sets a tone that makes compliance with the law paramount, implements safeguards to prevent future criminal activity, and makes clear to every eBay employee that the idea of terrorizing innocent people and obstructing investigations will not be tolerated.”
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