Attorney General Thomas F. Reilly yesterday accused the head of a West Boylston company of using two auction Web sites to sell $750,000 of Apple computers that didn't exist.
A spokesman for eBay, where most of the transactions were conducted, said it appears to be one of the largest-ever cases of fraud involving the popular auction site. The other Web site used was Auction Works.
Reilly's suit accuses Teresa Smith, who until recently lived in Worcester and now resides in Manchester, Conn., of taking $750,000 from about 260 customers across the country and failing to deliver the Apple Macintosh computers she had promised them.
"This individual is accused of selling merchandise that she knew she did not have," Reilly said in a statement. "She set delivery dates, told consumers falsely that computers had been shipped, and then failed to provide refunds."
Smith's attorney, Angelo Catanzaro, could not be reached for comment. According to Reilly's complaint, Smith operated her business as Shadow SB in West Boylston. Its legal name was Smith/Berkeley.
Glen Cortese, a freelance composer and conductor who lives in New York City, placed an order in February with Shadow SB through eBay for a $2,295 computer he planned to use in his work.
"It seemed like a legitimate company," he said, noting it had a functioning interactive Web site and, initially, staff that would respond to e-mails and phone calls.
When his computer failed to arrive and the excuses for the delays continued, Cortese said he asked for a refund. He said he received two refund checks, both of which bounced.
Reilly's office is seeking full restitution for all customers, but Cortese said he doubted he would ever see any of his money. "I don't know what kind of assets she has," he said. Cortese said he has also filed a complaint with the FBI, which is also investigating.
Last summer, according to Reilly's complaint, Smith began selling Apple Macintosh computers over the Internet, charging between $1,500 and $3,500 for various models. Customers paid using either a credit system developed by eBay, wire transfers, or certified checks.
The complaint states that Smith offered a variety of reasons for why computers were not delivered promptly, from staff departures to shipping delays.
The complaint says Smith in February began offering consumers full refunds, and some consumers actually received their money back. But the complaint says more than 100 customers received checks that bounced, which Smith blamed on ill-timed bank transfers or a supplier that had pocketed $300,000 of her money. In all, the complaint says, 260 people failed to receive refunds.
Kevin Purseglove, a spokesman for eBay, said instances of fraud on eBay are rare. He said the site handles $36 million in transactions daily and the responsibility for completing those transactions is left up to the buyer and seller. He said eBay is merely the trading venue and cannot vouch for the legitimacy of buyers and sellers.
Cortese, who said he has bought and sold items on eBay many times in the past, including a car, acknowledged the company's policies clearly state that buyers and sellers are basically on their own in dealing with one another. But he said he thinks eBay is irresponsible in taking such a hands-off attitude. |
