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Feds arrest Silk Road fake coupon seller on fraud, counterfeit charges
A Louisiana man was arrested on Thursday on charges relating to his sale of fake coupons on the now defunct Dark web marketplaces Silk Road and Silk Road 2.0
According to the Department of Justice (DOJ,) Beau Wattigney, aged 30, has been charged with conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting.
Wattigney is alleged to have operated on the sites under the usernames of ThePurpleLotus and TheGoldenLotus, and sold packages of counterfeit coupons that buyers could then print out and use at local stores or resell them to others.
The coupons are said to have included counterfeit trademarks for many prominent coupon distribution services, including Hopster, Coupons.com, SmartSource and RedPlum.
One package sold by Wattigney titled “The Original S.R. Exclusive Coupon Collection” sold for the equivalent in Bitcoin of around $50.00, while another coupon he sold for one cent allowed users to obtain a $50 Visa Gift card.
The DOJ claims that if the coupons sold had been redeemed, businesses would have lost over $1 million.
“Anonymous online marketplaces have provided criminals with the ability to conduct illegal operations worldwide while seemingly insulating them from apprehension and prosecution,” Assistant Attorney General Caldwell said. “The Criminal Division is determined to peel back the veil of anonymity and prosecute criminals of all stripes who attempt to use the ‘dark web’ to cloak their illegal conduct.”
Trading on good will
The scam worked around the good will many businesses have in giving the benefit of the doubt to customers trying to redeem coupons; even if a coupon didn’t scan properly they would often allow the discount to the customer so as to not lose future business.
What the businesses wouldn’t have known is that the coupons themselves were counterfeited.
The arrest is a first in the DOJ’s attempts to crack down on Dark web marketplaces, as it is (as much as we can recall) the first time anyone has ever been arrested for selling fake coupons in the space.
The move though does follow in the footsteps of a number of arrests related to the running of Silk Road, including that of Ross Ulbricht.
Image credit: cpyles/Flickr/CC by 2.0
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