CAMDEN A 31-year-old Gloucester City man today admitted defrauding eBay bidders of approximately $15,000 on auctions for Sony Playstation 2 video game consoles and making unauthorized reproductions of the motion picture “Any Given Sunday” and compilations of National Hockey League highlights and professional fight footage, U.S. Attorney Christopher J. Christie announced.
Michael Kaighn, who is unemployed, pleaded guilty before U.S. District Judge Freda L. Wolfson to a two-count Information charging one count of wire fraud and one count of criminal copyright infringement, according to Assistant U.S. Attorney Scott S. Christie. Kaighn is scheduled for sentencing on Dec. 15 at 10:00 a.m. He faces a maximum sentence of five years in prison and a $250,000 fine on the wire fraud charge. On the criminal copyright charge, Kaighn faces a maximum sentence of three years in prison and a $250,000 fine. He also could be ordered to pay restitution and the costs of prosecution. According to the Information, in August and September 2000, Kaighn began opening accounts on the online auction site eBay under aliases. He opened one account using the name of a relative (D.S.) with the username “sellinmystuff.” He also opened an eBay account using the fictitious name Patrick Grogan with the username “nocturnalcreature.” Kaighn admitted to Judge Wolfson that from Oct. 3, 2000 through Oct.19, 2000 using the eBay accounts “sellinmystuff” and “nocturnalcreature” he posted approximately 25 separate auction listings on eBay under the aliases D.S. and Patrick Grogan. In each of them he offered for sale a Sony Playstation 2 video game console, an extra game controller for the console, an eight-megabyte memory card for the console, and a choice of two video games compatible with the console. In these auction listings, Kaighn guaranteed shipment no later than Oct. 27, 2000, and receipt by the winning bidders on or before Oct. 31, 2000. According to the Information, during this time period, the Sony Playstation 2 video game console was a highly sought after piece of electronic equipment in the United States. In anticipation of the U.S. release of this product by Sony on Oct. 26, 2000 and in light of the impending Christmas shopping season, many individuals were willing to pay significantly more than retail value for a Sony Playstation 2 video game console. Kaighn further told Judge Wolfson that, using the aliases D.S. and Patrick Grogan, he communicated with the winning bidders for the Sony Playstation 2 auctions via e-mail and directed them to send payment in advance of shipment, that is on or before Oct. 26, 2000. Kaighn cautioned the winning bidders that if he did not receive advance payment from them, he easily would find other purchasers for these high-demand video game consoles who were willing to pay in advance of shipping. At Kaighn’s direction, most of the winning bidders mailed to the defendant’s home address money orders payable to either D.S. or Patrick Grogan. Kaighn recounted that by Oct. 26, 2000, he had received advanced payment in the form of money orders from approximately 20 of the winning bidders on the Sony Playstation 2 auctions. Thereafter, he endorsed the money orders in the name either of D.S. or Patrick Grogan and deposited into a personal bank account over which he had control. When Kaighn failed to deliver any of the Sony Playstation 2 video game consoles to winning bidders by Oct., 31, 2000 the winning bidders began to contact him via e-mail to complain using the contact e-mail addresses for D.S. or Patrick Grogan. In responsive e-mails, from Oct. 31, 2000 through Nov. 3, 2000, Kaighn admitted that the Sony Playstation 2 auctions were fraudulent, but falsely blamed D.S. for orchestrating the scam. In this manner, Kaighn defrauded winning bidders on the Sony Playstation 2 auctions of a total of approximately $14,944. During a search of Kaighn’s former Woodbury Heights residence on Nov. 3, 2000, officers of the Woodbury Heights Police Department seized, among other things, dozens of unauthorized copies of copyrighted movies and hockey video footage. Kaighn admitted to Judge Wolfson that in addition to the Sony Playstation 2 auction scam, he had made unauthorized reproductions of the motion picture “Any Given Sunday” and National Hockey League highlight and fight footage compilations with a total retail value of approximately $3,000. Under an Information, a defendant waives the right to have his case presented to a federal grand jury and, instead, pleads guilty to charges presented by the government. Under U.S. Sentencing Guidelines, Judge Wolfson will determine Kaighn’s actual sentence based on a formula that takes into account the severity and characteristics of the offense and the defendant’s criminal history, if any. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time. U.S. Attorney Christie thanked officers of the Woodbury Heights Police Department for their valuable assistance in the investigation. U.S. Attorney Christie credited Postal Inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Postal Inspector in Charge Martin Phanco, with developing the case against Kaighn. The government is represented by Assistant U.S. Attorney Christie of the U.S. Attorney’s Computer Hacking and Intellectual Property Section in Newark. Defense Attorney:
George G. Horiates, Esq. Pennsauken
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