Three Sentenced for “Wiseguys” Scheme to Purchase 1.5 Million Premium Tickets to Events Through Computer Hacking and Fraud

NEWARK, NJ—Three principal operators of Wiseguy Tickets, Inc., were sentenced today in connection with their multimillion-dollar scheme to bypass the security mechanisms of online ticket distributors to buy premium tickets in bulk and resell them for a profit, U.S. Attorney Paul J. Fishman announced.

Kenneth Lowson, 41, Kristofer Kirsch, 38, of Los Angeles; and Joel Stevenson, 38, of Alameda, Calif., previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court. Lowson and Kirsch each pleaded guilty to Count One of the superseding Indictment, which charged conspiracy to commit wire fraud and exceed authorized access to computers engaged in interstate commerce. Stevenson pleaded guilty to a superseding Information charging him with exceeding authorized access to computers engaged in interstate commerce. Lowson and Kirsch were each sentenced to two years of probation and 300 hours of community service; Stevenson, who pleaded guilty to a misdemeanor charge, was sentenced to one year of probation. Lowson was also ordered to forfeit $1.225 million.

Faisal Nahdi, a co-conspirator, remains at large.

According to documents filed in this case and statements made in court:

The defendants engaged in a scheme in which they and their company, Wiseguy Tickets, Inc. (“Wiseguys”), targeted Ticketmaster, Telecharge, Tickets.com, MLB.com, MusicToday, LiveNation and other online ticket vendors. The defendants fraudulently obtained prime tickets to performances by, among others: Bruce Springsteen, Hannah Montana, Bon Jovi, Barbara Streisand, Billy Joel, and Kenny Chesney. The criminal scheme also targeted tickets to live theater, including productions of Wicked and The Producers; sporting events, including the 2006 Rose Bowl and 2007 Major League Baseball playoff games at Yankee Stadium; and special events – including tapings of the television show Dancing with the Stars. The events took place in Newark and East Rutherford, N.J., and across the United States – including in New York; Anaheim, Calif.; Chicago; Houston; Los Angeles; Omaha, Neb.; Philadelphia; Pittsburgh; and Tampa, Fla.

Lowson and Kirsch, who owned Wiseguys and directed all of the company’s operations, and Stevenson, the company’s chief U.S.-based programmer, used Wiseguys to obtain and resell millions of dollars worth of sought-after premium tickets, typically selling them to ticket brokers at a mark-up over face value. In turn, the brokers sold the tickets to the general public at significantly higher prices.

To ensure fair access to tickets, online ticket vendors restrict access to their ticket purchasing systems to individual users, as opposed to computer programs that purchase tickets automatically, and restrict the number of tickets that an individual customer can purchase. To enforce these restrictions, the vendors use computer software designed to detect and prevent automated programs from accessing the computers. To defeat these technologies, the defendants worked with computer programmers in Bulgaria to establish a nationwide network of computers that impersonated individual visitors to the websites. The defendants thus gained a significant advantage over the general public in having access to the best seats to desirable events, purchasing approximately 1.5 million tickets.

The defendants admitted to the use of aliases, shell corporations and fraudulent misrepresentations – both to deploy the computer network and to disguise their ticket-purchasing activities. At various times the defendants, and others working at their direction, misrepresented Wiseguys’ activities to vendors; to the companies that leased Internet access to Wiseguys for use of the network; to the landlords for Wiseguys’ office space; and to lower-level employees at Wiseguys.

The defendants also created and managed hundreds of fake Internet domains (e.g., stupidcellphone.com) and thousands of e-mail addresses to receive event tickets from online ticket vendors. Additionally, the defendants directed the development and deployment of technologies designed to defeat online ticket vendors’ software.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, with the investigation. He also thanked special agents of the United States Postal Inspection Service, under the direction of Inspector in Charge Philip R. Bartlett in Newark, for their work.

The government is represented by Assistant U.S. Attorneys Erez Liebermann, Chief, and Seth Kosto of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crime Unit and Josh Goldfoot, Trial Attorney, United States Department of Justice, Computer Crimes and Intellectual Property Section.

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Defense counsel:
Lowson: Mark Rush, Esq., Pittsburgh
Kirsch: John P. McDonald, Esq., Somerville, N.J.
Stevenson: John Yauch, Esq., Assistant Federal Public Defender, Newark