Third Man in eBay Shill-Bidding Scam Pleads Guilty

SAN FRANCISCO (Reuters) - A California man who went on the run for two years after being accused in an Internet scheme to sell a fake painting purportedly by a famous American abstract artist pleaded guilty to six counts of money laundering, U.S. prosecutors said on Wednesday.

Kenneth Fetterman entered the guilty pleas in U.S. District Court in Sacramento for his role in the plot to inflate the price of a fake Richard Diebenkorn painting and other art works placed for auction on eBay Inc.

Fetterman is the third person to enter a guilty plea related to the case, in which prosecutors said defendants used aliases to enter fraudulent bids with the goals of attracting interest from other, unsuspecting bidders and inflating the price of hundreds of paintings auctioned on eBay from late 1998 to mid-2000.

Prosecutors charge that the defendants induced one eBay (EBAY.O: Quote, Profile, Research) user from the Netherlands to place a winning bid of about $135,805 for a painting, which was a fake of a work by Diebenkorn, an American abstract painter.

In 2001, Scott Beach entered a guilty plea on one count of wire fraud and three counts of mail fraud related to the case. Kenneth Walton, a former attorney, pleaded guilty to three counts of wire fraud and four counts of mail fraud for making shill bids. Sentencing for Fetterman, who fled after his indictment in 2001 and evaded authorities for nearly two years, is scheduled for May 11.

Beach and Walton are scheduled for sentencing on June 2.

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