Wiseguys face the music for trying to play it smart in online ticketing
Friday, April 9, 2010
In the increasingly sophisticated world of ticket brokering, the Wiseguys have grabbed attention.
Whether they are crooked or merely clever will be up to a jury.
Federal investigators charge that a ring of hackers working for Wiseguy Tickets Inc. cracked security measures at Ticketmaster and other major vendors. They gained control of 1.5 million tickets to popular and coveted concerts and sporting events nationwide between 2002 and 2009. Operating mainly out of Los Angeles and San Francisco, the Wiseguys earned $25 million, as prosecutors tally it, selling premium seats at inflated prices to brokers who resold them at even higher markups to the public.
While thousands of adoring fans perched patiently at computers hoping to score good seats to everything from the Hannah Montana tour to Wrestlemania, the Wiseguys hired cheap Bulgarian programmers and began registering as many as 100,000 Internet addresses to jump the cyber-line at electronic ticket booths and make a fortune, federal prosecutors say.
Legions who tried, but failed, to get face-value tickets for the July 2007 appearance of televangelist Joel Osteen at Verizon Center or the October 2008 Redskins-Eagles game in Philadelphia or the three-day Phish reunion in March 2009 in Hampton, Va., can blame the Wiseguys, say prosecutors in Newark, who contend that the company flourished due to criminal fraud and conspiracy.
If only for the audacious corporate name, the Wiseguys case was bound to stand out. Yet the sweep and speed of its buying jags sets the Wiseguys operation apart from other court disputes and fan protests over the past three years. As Internet ticket sales have grown -- in some cases, the Web is the only place to get tickets to the most popular shows -- so, too, have struggles to control them. Ticket companies haven't been able to thwart every programmer who would pluck them clean, and the regular guy is left without tickets to his favorite band's one local appearance.
As prosecutors tell it, the Wiseguys knew exactly what they were doing:
They used the Bulgarian hackers hired at $1,000 a month to create automated programs known as bots that flood vendor sites and buy hundreds of choice tickets in split-second transactions.
They targeted seats set aside for patrons with limited vision because those spots were closest to a stage.
They posed as tweens in a Miley Cyrus fan club to draw a bead on pre-sales.
Major vendors, including Ticketmaster, the world's largest ticketing company, spent more than $1 million to combat automated attacks. But they were bested by a company with 15 employees, according to federal agents.
On gross annual revenues, the Wiseguys were turning a 20 percent profit, court records show.