As you may have seen or heard, I have been accused of wire fraud, to nobody’s greater shock than my own. What’s written on my Wikipedia page is factually true, through grossly misleading. [Update 4/17/13: I have pled guilty to one count of writing one ad-tracking cookie in 2006 from a mapping utility website called profilemaps.info.]
There is an obvious irony in this accusation, as I am best known as a semi-public figure whose primary purpose is in protecting people from being defrauded — either financially, by worthless products and services, or intellectually, by harmful misinformation. As my podcast is supported almost entirely by donations from listeners who trust me, I obviously owe you all an explanation.
My consulting company is one of a number of former eBay affiliate marketers whom they have sued alleging fraud, and against whom they have also brought criminal charges. Although civil and criminal lawsuits are not the same thing, these two cases are with the same judge, same courtroom, and make identical accusations; so they’re basically the same case. The mess has been going on since July 2007, so it’s nothing new.
My company was a partner in a firm that contracted with eBay to advertise their service, which we did through a number of widgets used by bloggers and MySpace profile owners. My personal involvement was as the software architect of one of these widgets. We were paid a commission by eBay for each new customer they gained through one of our advertisements. For about 9 months, we were pretty successful, and had a great relationship with eBay. Then, one day, without any kind of warning or any indication that eBay was dissatisfied, my home was raided by 15 armed FBI agents. eBay accused us of “cookie stuffing”.
Cookie stuffing refers to a web site writing a cookie to your browser without your knowledge or permission. It usually refers to a “third party cookie”, which means that if you visit the site ABC.com, you end up with a cookie from XYZ.com. It’s easy to see this in action. Take any web browser, erase all its cookies, and adjust its security preferences to allow third party cookies. Then, click through a few pages on any ad-supported web site, like Slate.com or HuffPo.com. Now look at your cookies. You’ll see that your browser is loaded with all sorts of cookies from strange web sites that you don’t recognize. That’s cookie stuffing. It’s a scary-sounding term, but it’s fundamental to the way Internet advertising works. Ad servers may need to know if you’ve viewed the ad before, or used a particular service before, or they may need to know where you’re located in order to show you the right ad (such geographic targeting was necessary for our eBay ads, which showed the geographic locations of MySpace profile visitors on a map). Cookie stuffing is more than just a standard practice; it’s an essential component of the mechanics of serving ads effectively.
With this understanding, you’re probably just as confused as we were to suddenly be accused of “defrauding” eBay. Ample evidence exists that eBay was fully aware of all the technical aspects of what we did, and there are a number of actions taken by them that prove this. I completely deny defrauding or “tricking” them in any way. Indeed, I maintain that my company was the most productive and valuable affiliate they ever had.
Obviously there are many intricacies here that go deeper, but I cannot give further details. There are several legal reasons that the lawsuit is improper, and we’ve been fighting it on that basis. Hopefully it will never go to trial, but if it does, my defense depends on evidence that I cannot describe publicly. It’s quite an amazing story, and I look forward to telling it in full detail as soon as the circumstances make it possible.
Please understand that, beyond what’s written here and was approved by my attorneys, I will not answer questions pertaining to the case.
Some bloggers and commenters have claimed that I personally made outrageous amounts of money. This is demonstrably false. Although I did well for the better part of a year, most of the money mentioned in the suit was earned by another affiliate, and our chunk was divided into many different pie slices. I was only one of those slices, despite being the only one criminally charged from our company. I’ve already spent more money in legal fees than I earned from eBay.
Skeptoid Media, Inc. is an independent California nonprofit corporation, and has no connection of any kind to the case. It was founded the year after my association with eBay was terminated, and is not in any legal jeopardy. Donations to Skeptoid are used exclusively to support the podcast and related projects. Skeptoid is now (almost) my full-time job, and I pay myself a small fraction of my consulting rate to compensate for as much of my time as I can. I am the head of a household of full-time students, and I do have to pay the bills. I’m working hard to make a full-time living from Skeptoid by the end of 2011, and earning your support is the top priority.
I’m in the process of converting Skeptoid into a 501(c)(3) nonprofit corporation. Once this is done, its financial records will be public.
On a personal note
The chronic stress has been very hard, on me and on my family. The financial devastation has been nearly complete. The psychological and emotional toll, during the most formative years of my children’s lives, can never be recouped. The image that my children have of me has always been one of my top priorities; and I’m angry that this has happened to them. I’m angry that my amazing wife has had to add, to her already too-long list of responsibilities and stressors, the need to spend full-time keeping me together as a person. It’s not right.
Fortunately, the response from family, friends, neighbors (who saw it all go down), and colleagues has been nearly universally positive. The support and encouragement I’ve received from those who know me has been invaluable and will never be forgotten. There have been a few fair-weather friends, who judged me based on their own “guilty until proven innocent” assumptions, but I don’t focus on them. If you are one of the many who have helped me to keep my chin up, it’s meant more to me than you’ll ever realize. I’m proud to know such people.
Note: this post was approved by my attorneys. There was much more I wanted to say, but can’t at this time. I’ve disabled comments on the post, and I hope you understand.