eBay sales being curtailed

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RobertR

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11/21 11:24
EBay Probed by Grand Jury Over Online Gun Sales, Documents Show
By David Glovin


New York, Nov. 21 (Bloomberg) -- A federal grand jury has investigated eBay
Inc. to determine whether the company broke any laws when it permitted gun
sales on its Internet auction site, according to court papers obtained by
Bloomberg News.

At least four eBay executives have testified before the grand jury since
prosecutors in Manhattan subpoenaed the company on Jan. 29, 1999, the court
papers show. Pierre Omidyar, eBay's founder, chairman and largest
stockholder, testified for five hours on Aug. 3, 1999, the papers show.

Omidyar told the grand jury that the San Jose, California- based company
believes it acted lawfully.

``In every conversation with our own outside counsel, inside counsel, ATF
(Bureau of Alcohol, Tobacco, and Firearms), and other . . . law enforcement
agencies, we were left with the impression that there was nothing that we
were doing that was illegal,'' Omidyar testified, the documents show.

No indictments have been returned, and neither prosecutors nor eBay would
comment on whether the investigation has concluded. The company, the world's
biggest Internet auction business, denied any wrongdoing in the court
papers.

On Feb. 19, 1999, three weeks after receiving a subpoena from federal
prosecutors, eBay announced that it was voluntarily banning gun sales on its
site. It said in a press release that online sellers cannot guarantee that
buyers comply with firearms laws.

In a statement today, eBay spokesman Henry Gomez said neither the company
nor any employees has been named as a target of the probe. ``EBay believes
it fully complied with all applicable firearms laws,'' Gomez said.

EBay shares, which have lost 52 percent in the past year, rose 31 cents to
$34.81 in morning trading today on the Nasdaq Stock Market. An analyst said
yesterday that the company's auction business is slowing down.

Government Subpoena

Lawyers for eBay and the U.S. Attorney's Office in Manhattan submitted the
court papers to the 2nd U.S. Circuit Court of Appeals last year after the
company objected to a government subpoena. The papers include legal briefs,
excerpts of grand jury testimony, correspondence between attorneys and other
documents.

The papers, dated November 1999, were spotted atop a stack of other court
documents in an uncovered recycling bin by a Bloomberg reporter who was
walking past it. An appeals court official said the papers should not have
been discarded in the bin, which was located in a hallway in the federal
courthouse in Manhattan.

``You found something that shouldn't have been where it was,'' court clerk
Roseann MacKechnie said.

The documents had been placed under court seal in accord with usual rules
that impose secrecy on grand jury proceedings.

Marvin Smilon, a spokesman for U.S. Attorney Mary Jo White, declined to
comment today on the allegations in the court papers. ``We can say, however,
that it is not uncommon that individuals and corporations are the subject of
grand jury investigations that do not result in criminal charges being
brought,'' he said.

Fresh Detail

EBay filed public papers with the Securities and Exchange Commission on
Sept. 30 that said a government ``inquiry'' was under way into ``possible
illegal transactions in connection with our Web site.'' Those papers neither
identified the agency conducting the investigation nor the matter under
review.

Published reports last year said the Bureau of Alcohol, Tobacco and
Firearms, an arm of the U.S. Treasury Department, was investigating eBay.

The newly obtained documents confirm that eBay was the subject of a grand
jury probe into illegal gun sales and provide new details about the
investigation.

``The grand jury is investigating the unlawful sale of firearms,
firearms-related items, and other items advertised and sold on eBay's online
auction site,'' prosecutors said in a legal brief.

According to the papers, eBay officials have told prosecutors that the Web
auctioneer permitted the sale of firearms only after the ATF in 1998 told
two executives at a meeting in San Francisco that the sales broke no laws.
The ATF had no comment.

Auction Site

Omidyar was ranked in September by Forbes magazine as the 51st wealthiest
American, with a net worth of $4.6 billion. His lawyer, John Carroll,
declined to comment.

EBay provides an online auction site where sellers advertise items and
buyers bid for them. The company lists about 4 million items for sale daily.
Sellers pay commissions for listing items online and another fee based on
the final sale price.

Prosecutors said the company was the ``subject'' of the investigation, a
formal designation that means its conduct is ``within the scope'' of a grand
jury probe, according to the Justice Department. EBay was not considered a
target, a description indicating prosecutors have ``substantial evidence''
of a crime.

In addition to the January 1999 subpoena, prosecutors in June 1999 requested
from eBay information on whether firearms sellers or buyers had federal
firearms licenses and were 18 or older.

In the papers reviewed by Bloomberg, prosecutors didn't outline their
evidence against eBay. However, included in the material is the transcript
of a hearing before U.S. District Judge Loretta Preska in October 1999 in
which Assistant U.S. Attorney David Finn said that prosecutors believe
``there are extremely damaging documents out there.'' Finn, who has since
left the U.S. Attorney's Office, could not be reached for comment.

Court of Appeals

The appeals court was called upon to rule in the investigation after eBay
refused to comply with a subpoena seeking more than 650 pages of documents,
including notes of the company's communications with its lawyers. Such notes
are typically shielded by the attorney-client privilege of confidentiality.

Prosecutors argued that eBay waived the privilege when Omidyar testified in
the grand jury that eBay moved forward with gun auctions after getting
approval from company lawyers, the papers show.

Preska ordered eBay to comply with the subpoena. The appeals court reversed
her ruling in July and ordered Preska to reconsider the case. It couldn't be
determined whether she has issued a new ruling.

While the appeals court decision is public and posted on a court Internet
site, the opinion -- recounting many details of the investigation -- refers
to the company as ``Doe Corp
 
Well, ain't that the end.

They also banned the selling of dirty stripper panties this week.

Guess we're all just going to have to find somewhere new to shop.
 
Interested to hear opinions from TFL attorney members

Sounds more likely to be harrassment than an honest concern about illegal sales ...

We now live in a country where government feels it is its right and duty to effectuate public policy by threatening litigation. I wonder how much of this goes on that we never, ever hear about.

Regards from AZ
 
Isn't this old news? They haven't allowed gun sales for quite a while (1 year or more?).

I know there are a couple of gun auction sites that use the same format that ebay does. I can't remember the URLs just now. They seem to have filled the niche nicely.
 
I hear that http://www.gunsamerica.com does a good job.


I think the news here, at least to me, is that they were targeted by the fed's. I've never used eBay, but I heard they stopped firearm sales. What I hadn't heard was the 'why' - I may well be wrong on this, but I was under the impression that everyone thought it was mainly a political statement on the part of eBay. Coercion by the fed's puts a different light on the matter, no?

Regards from AZ
 
When eBay stopped dealing with firearms and related items, I sent them a mild nastygram and told them to "include me out!"

They continued to send me cutesy little notices. I told them to quit. They didn't quit.

I threatened to charge them in federal court (interstate commerce, you know) with harassment.

They finally stopped.

I wish them every misery.
 
There was a big to do over this when e-bay put out their decision to stop listing guns on their site. The reasons we got from e-bay was that they felt that unless they could find some way to verify that the seller or buyer was an FFL that they could not sell. We could not get any more out of them. We showed them where they were wrong in this regard, but they then claimed up in response. It now makes a whole lot of since as to why…. I’ll guarantee that the BATF got orders to shut down e-bay’s gun listings by Clinton. This is just another example of our gov out of control.
 
Once eBay quit their on-line gun auctions, I quit eBay. I use to use it regularly, now I never go back. I knew that eBay quit guns for legal purposes, but I never understood why....Now I know, it WAS (had to be) the Clinton administration as they were heavily into banning arms and they still are trying to kill the 2nd.

I still use the internet pretty heavily for my shooting activities, both buying and selling. I can tell you from experience that the following ARE the two best on the internet and they cater to the pro-second people. If you haven't as yet tried them, give it a shot (no pun intended):

AUCTION ARMS:
http://www.auctionarms.com/

GUN BROKER
http://www.gunbroker.com/
 
Richard, thanks for filling in the details. I didn't remember this being public before. I do wonder how often Clinton has pulled this kind of thing, and it just never became public.

Regards from AZ
 
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