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Bulgarian Woman Arrested for eBay Fraud Scheme

The FBI has arrested a Bulgarian woman in connection with an international scheme that's responsible for defrauding eBay users of more than $350,000.

The agency announced on Monday that police in Budapest, Hungary had on March 22 arrested Mariyana Feliksova Lozanova, aka "Gentiane La France," aka "Naomi Elizabeth DeBont," with conspiracy to commit wire fraud and money laundering. Lozanova has waived extradition to the United States.

The indictment charges that Lozanova and others allegedly advertised expensive motor vehicles and boats on eBay. When U.S. buyers expressed interested, a purported seller contacted them directly by e-mail.

The modus operandi matches that described by eBay watchers who have tracked a sharp increase in fraud on the auction site over the past few months. So too does it match the boasts posted on eBay forums by hackers.

Namely, the crooks told their victims to wire payment through a non-eBay entity. In this case, the fraudsters called the entity "eBay Secure Traders," an outfit that has no actual affiliation to eBay but which served to trick buyers into thinking they were sending money into a secure escrow account pending delivery of their purchases.

In fact, the funds were allegedly wired straight into bank accounts in Hungary or Slovakia that were controlled by Lozanova or her co-conspirators.

The FBI alleges that Lozanova opened the accounts with a fraudulent Canadian passport that identified her as "Gentiane LaFrance" and a fraudulent U.K. passport that identified her as "Elizabeth Naomi DeBont."

The victimized buyers' cars and boats were never delivered., nor was their money ever returned. The indictment charges Lozanova with withdrawing the proceeds shortly after the funds had been wired into her account and distributing them to members of her gang in Budapest.

If convicted, Lozanova faces a maximum sentence of 20 years in prison for the wire fraud conspiracy and 10 years in prison for the money laundering conspiracy. She could also be looking at fines totaling more than $500,000, as well as forfeitures and restitution to victims.

eBay said that it just goes to show: "Crime doesn't pay," said Nichola Sharpe, a spokeswoman for eBay, in an interview with eWEEK. "It's so transparent. We have strong collaboration with the police. We do catch these people."

eBay doesn't release official figures for how many scammers the company and law enforcement are tracking. But as Sharpe pointed out, the online auction site has banned, for example, instant money transfer services, such as Western Union.

eBay has over 2,000 employees working in what the company calls its Trust and Safety division. Those employees' key role is to make the site a safe place to trade, Sharpe said, and that means they're practically everywhere that eBay is. "This is a global team," she said. "A lot of the different countries we're in, we have a different team. In Europe we have a team. These crimes are global, and we have a global team to reflect that."

Members of the team are often experienced law enforcement types, as well, she said, including one ex-Scotland Yard detective and a number of people with experience in law enforcement in the United States.

The FBI said in a statement that its investigation into the scam that allegedly involved Lozanova is ongoing.

* This entry was updated to include eBay's input.