Computer Fraud and Abuse Act

The US Attorney in Newark, NJ has charged the operators of Wiseguy Tickets Inc., a ticket reselling service, with one count of conspiracy, numerous counts of wire fraud (18 U.S.C. §1343), additional counts of obtaining information from a protected computer and other counts of accessing a protected computer with intent to defraud in violation of the Computer Fraud and Abuse Act of 1986 (18 U.S.C. §1030). In the indictment, the government claims the defendants purchased tickets from Ticketmaster by automated means, violating Ticketmaster's terms of service and therefore the Computer Fraud and Abuse Act (CFAA).The defendants, who were able to beat computer security with the use of CAPTCHA bots, bought and scalped 1.5 million seats for events such as Bruce Springsteen concerts.

They have now asked US District Court Judge Katherine S. Hayden to dismiss the charges which they claim turn lawful activity into crimes. Prosecutors claim that after buying tickets on a first-come, first-saved basis through Ticketmaster, Live Nation Entertainment Inc., Telecharge and other vendors, the defendants resold them making more than $28.9 million in profit from 2005 to 2008. In their Memorandum of Law in support of the Motion to Dismiss, lawyers for defendants called the indictment “a naked effort to punish legal conduct under federal law -- the resale of tickets for events -- by using the Computer Fraud and Abuse Act (‘CFAA’), a statute that has nothing to do with so-called ‘ticket scalping’”.

The Electronic Frontier Foundation (EFF) has filed an amicus brief in the case arguing that the prosecution in this case expands the scope of the CFAA beyond what Congress intended, grounding criminal liability in whatever arbitrary terms of service that websites decide to impose on users. "Under the government's theory, anyone who disregards -- or doesn't read -- the terms of service on any website could face computer crime charges," said EFF Civil Liberties Director Jennifer Granick. "That gives Ticketmaster and other online services extraordinary power over their users: the power to decide what is criminal behavior and what is not. Price comparison services, social network aggregators, and users who skim a few years off their ages could all be criminals if the government prevails."

Bloomberg reporter David Voreacos has more information on the case in his article ‘Wiseguys’ Ask U.S. Judge to Dismiss Scalping Charges. PC Mag.com's article Four Indicted in CAPTCHA Hacks of Ticket Sites, from earlier this year, gives more details on Wiseguy Tickets.