Two `Wiseguys' Plead Guilty to Hacking Computers in Ticket Scalping Case

Two men pleaded guilty to using illegal computer tactics to buy and resell more than 1 million choice seats for events for events such as Bruce Springsteen concerts and the Rose Bowl football game.

Kenneth Lowson, 41, and Kristofer Kirsch, 37, admitted in federal court in Newark, New Jersey, that they made more than $25 million in profit by illegally cutting ahead of the public to buy premium seats through Live Nation Entertainment Inc.’s Ticketmaster Entertainment Inc. and other vendors.

Lowson and Kirsch, two Los Angeles men who co-owned Wiseguy Tickets Inc., pleaded guilty yesterday to conspiracy to commit wire fraud and gain unauthorized access to protected computers. A Wiseguy computer programmer, Joel Stevenson, 37, of Alameda, California, also pleaded guilty to a misdemeanor computer crime.

“These defendants made money by combining age-old fraud with new-age computer hacking,” U.S. Attorney Paul Fishman said in a statement. “Their guilty pleas confirm that no matter what they called their activities, they were criminal violations.”

Under a plea deal, Lowson and Kirsch face as long as two years in prison. Stevenson faces as long as one year in prison. U.S. District Judge Katharine Hayden set sentencing for March 15.

The three men were initially charged Feb. 23 with a fourth man, Faisal Nahdi, who remains at large.

Lowson and Kirsch had previously argued that their actions may have been civil violations of the law, not criminal.

Bon Jovi, Barbra Streisand

They pleaded guilty to a conspiracy charge in a 43-count indictment, admitting that they fraudulently bought prime seats to concerts by Springsteen, Hannah Montana, Bon Jovi, Barbra Streisand, Billy Joel and Kenny Chesney.

They admitted fraudulently buying tickets to the 2006 Rose Bowl and the 2007 Major League Baseball playoffs at Yankee Stadium. They admitted buying almost half of the 440 best general admission floor seats to a July 2008 concert by Springsteen at Giants Stadium in East Rutherford, New Jersey.

Lowson and Kirsch admitted they defeated computer systems that barred automated programs from buying tickets sold on a first-come, first-served basis.

By working with programmers in Bulgaria, California-based Wiseguy Tickets sidestepped technology known as CAPTCHA, which required users to read, then retype, distorted images of letters and numbers to buy tickets, Lowson and Kirsch admitted. They also evaded audio CAPTCHA challenges for the visually impaired.

By getting around CAPTCHA challenges in tenths of a second, the defendants sped up the purchasing process when other consumers were locked out of the primary ticket market, according to prosecutors.

“They sold tickets to a public that craves tickets” and resold them to others “who couldn’t procure them through Ticketmaster,” Lowson’s attorney, Mark Rush, said after the hearing.

The case is U.S. v. Lowson, 10-cr-114, U.S. District Court, District of New Jersey (Newark).

To contact the reporter on this story: David Voreacos in Newark at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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