January 14, 2003 1:33 PM PST

Police nab fugitive in eBay fraud case

Federal authorities say they've finally found a fugitive who was indicted more than two years ago on charges related to the auction of a fake Richard Diebenkorn painting on eBay.

Kenneth Fetterman was arrested Saturday by Sedgwick County sheriff's deputies in Wichita, Kan., on charges of marijuana possession and driving without a license. He was initially pulled over for driving with a broken windshield.

Sheriff's deputies identified Fetterman as the eBay fugitive through fingerprinting and detained him. Federal prosecutors in California are seeking to bring him to the state capital Sacramento, where he originally faced criminal fraud charges related to the eBay bidding.

"This arrest and prosecution highlight the important joint efforts by the Internal Revenue Service and the Justice Department to bring white-collar criminals to justice," Cleve Daniels, a special agent with the IRS Criminal Investigation unit, said in a statement. The FBI, the IRS Criminal Investigations unit and the Sacramento Valley Hi-Tech Crimes Task Force have been investigating the case.

In March 2001, Fetterman and two other men were indicted on charges related to using a variety of eBay user IDs to place fake bids and drive up the price of auctions between November 1998 and June 2000. Prosecutors said the trio induced an eBay user to bid more than $135,805 for a fake Diebenkorn painting after posting more than 50 fraudulent offers for it.

At the time, the incident was one of the highest-profile cases of online auction fraud.

Fetterman fled his apartment in the South Lake Tahoe, Calif., area after reading a story about the charges against him in a local newspaper, prosecutors said. The two other men indicted, Kenneth Walton of Sacramento and Scott Beach of Lakewood, Colo., pleaded guilty to charges of wire and mail fraud in U.S. District Court in Sacramento in April 2001. They're scheduled to be sentenced this April.

Fetterman faces four counts of wire fraud, six counts of mail fraud and six counts of money laundering. Each wire and mail fraud charge carries penalties of up to five years in prison and fines of $250,000. The money-laundering charges each carry a penalty of up to 20 years in prison and fines of $500,000.

An attorney for Fetterman could not be immediately reached for comment. Representatives of the U.S. Attorney's office in Sacramento did not return phone calls seeking comment. Fetterman's bail hearing is set for Wednesday.

 

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