March 01, 2010

By By Reuters

Four people were indicted for illegally buying and then reselling tickets to sought-after shows like Bruce Springsteen, Hannah Montana and Bon Jovi concerts as well as top Broadway shows and baseball games, the Justice Department said on Monday.

The scheme yielded some $25 million for the men, three of whom have surrendered to authorities, the department said.

The 43-count indictment describes a scheme by a company, Wiseguy Tickets Inc, which bought prime tickets being sold by Ticketmaster, Tickets.com, MLB.com and other ticket providers, to resell them at higher rates.

In one instance, the indictment said, Wiseguy Tickets managed to buy nearly half of the 440 general admission floor tickets for a July 2008 Bruce Springsteen concert at Giants Stadium.

Wiseguy employees were ecstatic, and in an internal company report described the purchase as "straight domination," having bought the "best ringsides by far."

Ticketmaster, which has since been bought by Live Nation Entertainment (LYV.N), has itself been accused of shunting tickets to a more expensive reseller, and last month settled with the Federal Trade Commission, which had accused it of deceptive ticket sales.

Computers controlled by Wiseguy jumped the virtual queues controlled by the major ticket seller by defeating the CAPTCHA software, the squiggly letters aimed at defeating automated programs by requiring humans to identify them.

Kenneth Lowson, 40, Kristofer Kirsch, 37, and Joel Stevenson, 37 have surrendered to authorities while Faisal Nahdi, 36, has not, the department said.

Lowson and Kirsch, who owned the company, are accused of hiring unnamed Bulgarian programmers to defeat online ticket sellers' CAPTCHA software, while they and Stevenson, himself a programmer, would work with the Bulgarians to figure out how to get the most and best tickets. Nahdi managed Wiseguy's finances.

Efforts to reach the accused, or their representatives, were not immediately successful.

Among the charges are conspiracy to commit wire fraud and to gain unauthorized access and exceed authorized access to computer systems.

"The allegations in this indictment represent a scheme orchestrated through technology to cheat the public and circumvent fair business practices in the entertainment industry," said Edward Kahrer, FBI assistant special agent in charge and head of its corruption program in the Newark Division. (Reporting by Diane Bartz; Editing by Tim Dobbyn)

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