Las Vegas Man Sentenced To Six Months For Creating And Selling Cookie-Stuffing Program
SAN JOSE, Calif. – Christopher Kennedy was sentenced yesterday to six month in prison for conspiracy to commit wire fraud, United States Attorney Melinda Haag announced. Kennedy was also ordered to pay approximately $407,934.39 in restitution to eBay, Inc.
According to court documents, eBay maintained an advertising and promotion program, known as the eBay Partner Network (EPN), through which websites that displayed eBay advertisements were reimbursed for referrals. Under the EPN, eBay paid a referral fee to a website when an advertisement directed a web user to the eBay website. When that user accessed the eBay website, a text string of code (cookie) was deposited on the user’s computer. This cookie contained information identifying the referring website (EPN ID) and was used to track whether and when the user returned to the eBay website. A subsequent visit to the eBay website resulted in payment of a referral fee when the user engaged in a revenue action, which occurred when the user utilized eBay’s auction service. If multiple cookies were present on the user’s computer, which occurred if the user has clicked on several different advertisements before engaging in a revenue action, the most recently deposited cookie (and its corresponding affiliate website) was credited for any revenue action.
According to his plea agreement, Kennedy, 30, a resident of Las Vegas, created and sold through his website, www.saucekit.com, a “cookie stuffing” program, known as “saucekit,” from January 2009 to November 2009. Cookie-stuffing is the act of depositing a cookie containing an affiliate website’s ID onto an individual’s computer without that individual having clicked on an advertisement or link. Cookie-stuffing occurs when an individual visits an affiliate website or web page, such as an eBay auction page, and, without clicking on an advertisement or link (and in some cases, without ever seeing an advertisement), a cookie containing the affiliate website’s EPN ID is placed onto the individual’s computer. The cookie remains on that individual’s computer for a period of time and, if that individual engages in a revenue action, eBay credits the affiliate. As a result, eBay pays referral fees to an affiliate, even though the individual who visited the affiliate website or web page had not been referred to eBay by that website or web page. In this way, eBay pays its affiliates fees to which they are not entitled.
An information was filed against Kennedy on Feb. 9, 2010. He was charged with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371. Kennedy pleaded guilty to that charge in federal court in San Jose on May 13, 2010. He is scheduled to begin serving his prison sentence on Sept. 20, 2012.
The maximum statutory penalty for each count of conspiracy to commit wire fraud in violation 18 U.S.C. § 371 is five years in prison and a fine of $250,000, plus restitution if appropriate.
Hanley Chew is the Assistant U.S. Attorney who prosecuted the case, with the assistance of Lauri Gomez and Elise Etter. The prosecution is the result of an investigation by the United States Secret Service. eBay cooperated with the Secret Service in the investigation.