A federal grand jury in Los Angeles has indicted six foreign nationals on charges related to an Internet sales scheme that allegedly defrauded Americans who attempted to purchase automobiles and other vehicles on the Internet through Web sites that included eBay Motors, Auto Trader, Yahoo Auto, Edmunds.com and Craigslist.
The 24-count indictment, which was returned Thursday afternoon, alleges a scheme in which vehicles were offered for sale on various legitimate Web sites. Money was subsequently collected from victims across the United States and supposedly put into escrow accounts with PayPal and eBay Motors. The money was then siphoned from the accounts with millions of dollars being sent to Europe. Not one vehicle was delivered to the hundreds of victims who lost more than $4 million during the three and a half years the scheme operated, according to the indictment.
The charges are the result of a probe by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Internal Revenue Service ‘s Criminal Investigation and the U.S. Secret Service.
The indictment alleges conspiracy to commit bank and wire fraud, nine counts of wire fraud, eight counts of bank fraud, conspiracy to commit money laundering and four counts of money laundering. Additionally, the indictment seeks the forfeiture of property and money illegally obtained through the scheme, including more than $4.2 million in U.S. currency. If they are convicted of the charges in the indictment, the defendants would each face sentences that could total hundreds of years in federal prison.
“As more people use the Internet to conduct everyday transactions, we are increasing our efforts to protect consumers from fraud artists committed to taking hard-earned money from consumers who are increasingly comfortable doing business in cyberspace,” said U. S. Attorney André Birotte Jr. “This case demonstrates our ability to track down even the most sophisticated fraud artist who attempted to hide behind false identities and the perceived anonymity of the Internet.”
The indictment alleges a scheme in which members of the conspiracy offered vehicles, including automobiles, motorcycles, motor homes and boats, for sale on various Web sites. After the purchase price was negotiated through
telephone and email communications, co-conspirators emailed fraudulent invoices to the purchasers. The fake invoices appeared to be from eBay, Edmunds.com, PayPal, and Google Checkout, and the documents often bore the names and logos of these legitimate companies. The victims were instructed to wire the agreed-upon purchase price into bank accounts they thought were related to the escrow companies, but had in fact been set up by members of the conspiracy who often used false identification to open the accounts.
The fraudulent invoices falsely represented that the funds would not be released to the purported sellers until the purchasers had received and approved the purchased vehicles, and victims were further told that they had the option of returning the vehicles at the seller’s expense within a week of receiving and inspecting the vehicle.
Despite receiving the purchaser’s funds for the vehicles, the indictment alleges, the defendants did not provide any vehicles to the victims, said prosecutors..
At least 110 bank accounts were opened to fraudulently receive proceeds derived from the Internet sales scam, according to the indictment. From Sept. 4, 2007 until Oct. 5, 2010, victims deposited at least $4 million into the fraudulent bank accounts.
The fraud charges alleged in the indictment each carry a statutory maximum penalty of 30 years in federal prison. The money laundering charges alleged in the indictment each carry a statutory maximum penalty of 20 years in prison.
Those charged in the indictment are:
• Corneliu Stefan Weikum, 37, a Romanian national who lives in Berlin and is currently in federal custody in Nevada;
• Yulia Mishina-Heffron, 23, a native of Yekaterinburg, Russia, who is in federal custody in Nevada;
• Sergej Bugaev, 38, a Russian national and resident of Berlin, who is currently in state custody in Orange County;
• Alexander Brem, 34, a native of Kazakhstan who lives in Berlin;
• Marina Talashkova, 24, of Yekaterinburg, Russia; and
• Rihards Avotins, 21, a Latvian resident.