Internet Fraud Casebook

Chapter 10. A Business Within A Business

ALAN F. GREGGO

Since the creation of Internet auctions, internal theft as a cause of loss to businesses has exploded. According to a CNBC segment that aired a while back, reporters estimated that online e-fencing was a $37-billion-a-year business — and it's only grown since then. It is much more profitable and less risky for criminals to sell stolen merchandise on the Internet. An unscrupulous employee can stock his own Internet business from his employer's shelves; without proper detection and prevention measures, such activity can go on for months and years.

The crime of e-fencing occurs when employees or boosters steal merchandise from a retail store or distributor and offer it for sale on Internet auction Web sites or through their own online store. A booster is a person who shoplifts goods after they have been displayed in a store, as opposed to an employee who steals merchandise from the stock room.

Internet auction Web sites have increased the viability of selling stolen products by offering fencers a far safer method than taking the loot to pawn shops, swap meets or selling it out of car trunks. The Internet allows the thief a level of anonymity that in-person transactions can't offer. Experienced and crafty Internet sellers will not provide their real identities to auction Web sites when they create accounts for the purpose of selling stolen products. Luckily for investigators, e-fencing is a new enough trend that not all the players ...