A True eBay Crime Story
08.05.2006 By Jenn Shreve
It was the scandal that rocked the internet. A seemingly worthless painting sold on eBay in early 2000 for $135,805 -- all because buyers believed it might be the work of the 20th-century abstract painter Richard Diebenkorn.
Nor was the story behind the painting true.
In fact, Sacramento, California, lawyer Kenneth Walton (www.kennethwalton.com) had forged the suspiciously Diebenkorn-esque signature, which appeared in an auction photograph, and concocted the hokey yarn about finding it at a garage sale some years back. Some of the highest bids, it turned out, came not from serious art-buyers but from Walton's eBay business partner, Ken Fetterman.
Before long the tangle of deceits that led to the historic sale began to unravel on the front pages of newspapers around the country. Walton and another business partner, Scott Beach, pled guilty to federal felony charges. After three years as a fugitive, Fetterman was finally arrested while on his way to a Frisbee golf tournament in Kansas.
Walton tells his side of this true internet crime story in his new memoir, Fake: Forgery, Lies, & eBay. Wired News spoke to him about the book and his experiences as an online outlaw.
Wired News: The story of your Diebenkorn auction broke on the front page of The New York Times in mid-2000. Do you feel the amount of attention your story got was a symptom of the times?
Kenneth Walton: It was on the front page of the Times three days in a row. I'm not sure it would have gotten the same amount of attention today. The scandal occurred right in the wake of the dot-com crash. Everyone's stock portfolios were crashing and the internet had turned from darling to devil overnight.
EBay's stock wasn't crashing, but the press was turning on them as well. Then I came along and gave them the perfect anecdote to go along with the idea that eBay was rampant with fraud.
WN: Was it rampant with fraud?
Walton: It was rampant with my fraud at the time, I suppose. There was and always is a certain amount of fraud that goes on on eBay.
WN: Let's talk about your fraud. You bought cheap paintings at garage sales and sold them, often, for hundreds of dollars and even thousands of dollars on eBay. How was that even possible?
Walton: In some of the sales I was involved with, they were paintings with forged signatures, and that's the subject of the book. A lot of the paintings I sold were simply good paintings I picked up at thrift stores and antique shops and I did sometimes make huge profits on them.
WN: In the case of the fake Diebenkorn, you even went so far as to make up this whole story around it. What was the effect you hoped it would have?
Walton: I realized there were a lot of art buyers out there who were looking for naive sellers who didn't know the value of what they had.
My description of the Diebenkorn painting was just a complete fable to make me look like a hapless everyman rube who found this painting in his garage, didn't know it's by Diebenkorn and puts it up and there's these letters in the corner but he doesn't know to mention and they just happen to appear in the corner of one of the photographs.
WN: You said your kid ran over it with a Big Wheel.
Walton: There was a hole in the painting and I said my kid ran into it with his Big Wheel and you might be able to fix it with duct tape. Of course, I don't have a kid or a Big Wheel.
WN: How many of the techniques you used are no longer possible today because eBay has cracked down on them, or people have become more savvy?
Walton: In the wake of the scandal, eBay really cracked down on shill bidding, and made it much more difficult for sellers to bid on their own items or (let) people they know bid on their own items. They put into place some very complex pieces of software to police that. I'm not going to say it's impossible anymore, but I think that's much tougher. That's been a big improvement to the site, probably as a direct result of complaints that arose after the Diebenkorn scandal.
WN: As a result of what you did, you became a felon, lost your law license, and it sounds like your personal life suffered as well. Were you surprised when you got caught and by how hard the law came down on you?
Walton: In California, shill bidding has been an infraction for a long time, subject to just a $100 penalty. It's less serious than a speeding ticket, so I was shocked that the feds wanted to prosecute it as a felony. In a way it was my legal background, the way I could research these things and come up for a reason this wasn't illegal that got me into trouble. I wasn't listening to my gut.
WN: I think a lot of people will be surprised to hear how you earn your living these days. You write software for eBay users. Right?
Walton: Well, it was an ironic twist to the story. I was forced to quit selling on eBay and eBay banned me for life and I had to give up (my) law license, so I really didn't know what to do for my career. A couple of my brothers were computer programmers and really loved it, so I decided to give it a try.
The first thing I wrote was an eBay fee calculator, and things took off from there. I ended up starting an eBay software company called Hammer Tap. It ended up doing very well. Eventually eBay found out I was running it. They threatened to sue me if I didn't sell it, so I wound up selling the company. At this point, I no longer have any connection (to eBay).
WN: For some people eBay seems to be this addiction that's hard to break. Do you think that's true?
Walton: Absolutely. It is an addiction of a sort, or at least it's a habit that's really hard to break. It's like a lot of things on the internet -- e-mail, blogs, RSS feeds -- things you have to check on a regular basis. They just give you quick fixes of something you want. I was completely hooked on it myself.
WN: For many people writing a book can be a redemptive act. Was it that way for you, a way of clearing your conscience of things?
Walton: I don't know if I could necessarily call it redemptive. It was very cathartic, and it was a way for me personally to come to terms with what had happened. Even if no one buys it, it was great for me to go through the process of writing.