Unethical and illegal
Altering collectible stamps without disclosing it is both unethical and illegal, according to officials with the American Philatelic Society, the national organization of stamp collecting.

Fred Baumann, a spokesman for the APS, explained that stamps are presumed to be in the condition in which they were found unless it is explicitly stated otherwise, and are valued accordingly.

"Provided you offer a stamp with the description that it has been professionally restored ... there’s nothing wrong with that," he said. "But if you’re offering it as being original and untouched and in pristine condition when you’ve used an eraser, a steam iron and put new gum on the back … certainly the item will not have the value that it appears to."

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Ken Lawrence, a leading authority on stamps and former vice president of the philatelic society, said after reviewing 10 "before" and "after" images provided by Kopecky that he had no doubt that “whoever is reselling these is selling fraudulently altered material. If this is the same person who made the alterations, this is the person who is perpetrating the fraud.”

The alterations were expert enough to fool Norman Hinds, 52, a former stamp dealer from Vero Beach, Fla., who said he lost $1,000 buying stamps from the forger on eBay before learning about SCADS and realizing he’d been duped.

“Some of the stamps I bought I sent off for certificates to have them authenticated. Every one of them had major problems,” he said, referring to alterations that were not disclosed in the auction listings. “What this guy is doing to people who don’t know a lot is just tragic.”

Kopecky estimates that the perpetrator, possibly working with accomplices, has made off with “between $1 million and $2 million” over the years, despite intermittent interruptions when their accounts get suspended.

EBay suspends 11 accounts
After initially showing reluctance to tackle the fraud, eBay has come round to SCADS' way of thinking. Since May 2003, it has suspended 11 accounts the collectors identified as being used in the scam.

SCADS members regarded eBay’s initial suspension of accounts as a milestone in their effort to clean up the site’s stamp forum, which had the reputation of being a hotbed of misrepresentation and fraud.

But they said the crook simply moved to Yahoo for a few months before returning to eBay using new identities.

That’s not hard to do, said Rosalinda Baldwin, CEO of The Auction Guild, an Internet auction watchdog, given that eBay doesn’t take every possible step to verify that people opening accounts are who they say they are.

“Can someone keep registering under false IDs and false registration and get away with it? Oh yeah, even the idiots can do that,” she said.

EBay spokesman Hani Durzy acknowledged that what the site calls “PSUs” — previously suspended users — are sometimes able to sign up for new accounts without being detected, but he said eBay is devoting more resources to keeping them off for good.

‘We are actually very good’
“There are steps that we take, though for obvious reasons we don’t go into details of what they are,” he said. "I would maintain that we are actually very good at keeping suspended users off, but we’re not as good as we could be.”

But Kopecky and others familiar with the stamp scam say the case clearly demonstrates that eBay’s efforts to expel scam artists are ineffective because the identity of the mastermind is known to the site’s security team.

Kopecky and several stamp experts interviewed by MSNBC.com, who spoke on condition of anonymity, said that solid circumstantial evidence points to the former stamp dealer, whose family has been in the philatelic business for decades and who formerly ran a brick-and-mortar stamp business. (Attempts by MSNBC.com to contact the former dealer by phone for comment were unsuccessful.)

Among the pieces of evidence:

In an article published in 1999 in Linn’s Stamp News, the ex-stamp dealer acknowledged that he used the eBay ID “chickfrdstk,” which SCADS later showed was used to purchase stamps that were subsequently altered and resold as originals. The account was one of those suspended by eBay in 2003.
At the request of MSNBC.com, two handwriting experts examined handwriting samples provided by Kopecky that he said were obtained from four eBay accounts used in the fraud. One expert, Diana Hall of Handwriting Sciences of San Bruno, Calif., said, “It is my expert opinion that all samples were written by the same person.” The second analyst, Linda James of Advanced Document and Handwriting Examination Services of Dallas, said that it is “probable” that all four samples were written by the same person.
Two eBay accounts used in the scam provided an address in upstate New York to eBay sellers and purchasers; that same address shows up on an Internet telephone search engine as the former stamp dealer's residence until 2004.
A postal inspector told MSNBC.com that several post office boxes in upstate New York that SCADS identified as having been used in connection with the sale of the altered stamps were rented by the ex-dealer.

CONTINUED: ATTEMPTS TO INTEREST LAW ENFORCEMENT

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