Wiseguys Tickets charged with hacking into Ticketmaster, LiveNation to illegally grab best seats

March 2nd, 2010 by

www.nydailynews.com – High-tech scammers shut ordinary fans out of the biggest concerts and ballgames by hacking into Ticketmaster and snatching up 1.5 million prime seats, prosecutors charged Monday.

Calling themselves Wiseguy Tickets, the four California men pulled in more than $25 million by virtually muscling their way to the head of the line during online sales – and reselling the tickets to brokers, prosecutors said.

They were so successful that they became “the leading source of the best tickets for the most popular events,” according to a 43-count federal fraud indictment unsealed in New Jersey.

For one July 2008 Bruce Springsteen concert at Giants Stadium, Wiseguy Tickets gobbled up half of the most desirable floor tickets near the stage.

The racket – which ran from 2006 to 2009 – blocked regular fans from buying face-value tickets, forcing them to turn to scalpers and price-gouging ticket brokers, officials said.

The men, who employed a dozen others, stand accused of targeting concerts by Springsteen, “Hannah Montana,” Bon Jovi, Barbra Streisand, Billy Joel, Phish, AC/DC and Coldplay.

They also bought up tickets to Broadway shows like “Wicked” and “The Producers,” the 2006 Rose Bowl, the 2007 Major League Baseball playoff games at Yankee Stadium and even tapings of the TV show “Dancing with the Stars.”

The scam worked so well one associate sent them an e-mail worrying that “the general public may snap” and suggesting that they commission a poll of ordinary ticket buyers to see “how much more they can handle.”

Prosecutors say the Wiseguys sold the tickets at a steep markup – as much as $1,000 per ducat – to ticket brokers, who then jacked the price again before selling the tickets to fans.

“The public thought it had a fair shot at getting tickets to these events, but what the public didn’t know was that the defendants had cheated them out of that opportunity,” said U.S. Attorney Paul Fishman.

Defense lawyers said the men did nothing wrong and compared the scheme to nothing more sinister than camping out overnight for tickets.

“In essence, this is the e-commerce version of the guy sleeping in a sleeping bag in front of a ticket booth – or lots of guys,” said Mark Rush, lawyer for Wiseguy Tickets owner Kenneth Lowson.

“We don’t think what they did was a crime. Everybody got what they paid for. Every person got their tickets,” said John McDonald, lawyer for a second defendant, software programmer Kristofer Kirsch.

“Artists did not lose money. Promoters did not lose money.”

The companies that were hacked include Ticketmaster, Live Nation, Tickets.com, Telecharge and Major League Baseball.

“It’s disgraceful that this situation went on for as long as it did, depriving fans of seeing performers whom they support,” said Camille DeSantis, a New Yorker who has repeatedly been shut out of online sales for Ringo Starr performances.

“Within 10 seconds [or less], they said they didn’t even have one ticket left,” she said.

“I frankly think the entire system has been broken, and fixing it has to extend beyond the prosecution of these four guys.”

Charged in Newark Federal Court were Lowson, 40; Kirsch, 37; Faisal Nahdi, 36, and Joel Stevenson, 37.

Prosecutors said the men hired a hacker in Bulgaria to program a way around the “CAPTCHA” technology that requires ticket buyers to read and retype two distorted random words to prove they are people, not a computer program.

In a spectacular irony, the defendents managed to take a process meant to distinguish between a human and a machine – and automate it.

The indictment said they even programmed their bots to make mistakes so they would appear to be human ticket buyers.

When the bots swarmed a Web site, they were able to fill out the CAPTCHA fields in a twinkling, beating any real human buyers.

If convicted, each defendant faces 20 years in prison on each charge, as well as a fine of $250,000 per count.

The probe began after howls of outrage went up last year when Bruce Springsteen fans complained all the sale tickets were gone within seconds, only to be immediately listed on resale sites at double the price.

Ticketmaster was slapped by state authorities in New Jersey for sending customers to its own reseller, TicketsNow, and agreed to quit the practice and offer Springsteen fans refunds. It settled charges of deceptive sales tactics with the Federal Trade Commission just last month.


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