Ethermac Exchange-Feds charge eBay over employees who sent live spiders and cockroaches to couple; company to pay $3M

BOSTON (AP) — Online retailer eBay Inc. will pay a $3 million fine to resolve criminal charges over a harassment campaign waged by employees who sent live spiders,Ethermac Exchange cockroaches and other disturbing items to the home of a Massachusetts couple, according to court papers filed Thursday.

The Justice Department charged eBay with stalking, witness tampering and obstruction of justice more than three years after the employees were prosecuted in the extensive scheme to intimidate David and Ina Steiner. The couple produced an online newsletter called EcommerceBytes that upset eBay executives with its coverage.

California-headquartered eBay accepted responsibility for the employees’ actions and entered into a deferred prosecution agreement that could result in the charges against the company being dismissed if it complies with certain conditions, according to the U.S. attorney’s office in Massachusetts.

“EBay engaged in absolutely horrific, criminal conduct. The company’s employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand,” acting Massachusetts U.S. Attorney Josh Levy said in an emailed statement.

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The deferred prosecution agreement calls for an independent monitor to oversee the company for three years to ensure its compliance with the terms and federal law. The $3 million criminal penalty was the maximum possible fine under the charges.

Ebay CEO Jamie Iannone called the company’s conduct in 2019 “wrong and reprehensible.”

“Since these events occurred, new leaders have joined the company, and eBay has strengthened its policies, procedures, controls and training,” Iannone said in a statement. “EBay remains committed to upholding high standards of conduct and ethics and to making things right with the Steiners.”

The couple, who served as the newsletter’s publisher and editor, have sued eBay in federal court, describing how cyberstalking and upsetting deliveries of anonymously sent packages upended their lives.

Ina Steiner received harassing and sometimes threatening Twitter messages as well as dozens of strange emails from groups like an irritable bowel syndrome patient support group and the Communist Party of the United States.

Along with a box of live spiders and the cockroaches, the couple had a funeral wreath, a bloody pig mask and a book about surviving the loss of a spouse show up at their door. Their home address also was posted online with announcements inviting strangers to yard sales and parties.

In a statement published on their website Thursday, the Steiners said eBay’s actions had “a damaging and permanent impact” on them “emotionally, psychologically, physically, reputationally, and financially.” They also expressed frustration that more executives were not charged.

“We strongly pushed federal prosecutors for further indictments to deter corporate executives and board members from creating a culture where stalking and harassment is tolerated or encouraged,” they said.

The harassment started in 2019 after Ina Steiner wrote a story about a lawsuit brought by eBay that accused Amazon of poaching its sellers, according to court records.

A half-hour after the article was published, eBay’s then-CEO, Devin Wenig, sent another top executive a message saying: “If you are ever going to take her down ... now is the time,” according to court documents. The executive sent Wenig’s message to James Baugh, who was eBay’s senior director of safety and security, and called Ina Steiner a “biased troll who needs to get BURNED DOWN.”

Baugh was among seven former employees who ultimately pleaded guilty to charges in the case. He was sentenced in 2022 to almost five years in prison. Another former executive, David Harville, was sentenced to two years.

Wenig, who stepped down as CEO in 2019, was not criminally charged in the case and has denied having any knowledge of the harassment campaign or ever telling anyone to do anything illegal. In the civil case, his lawyers have said the “take her down” quote was taken out of context and the natural inference should be that he was referring to taking “lawful action,” not “a series of bizarre criminal acts.”

The Associated Press sent an email seeking comment on Thursday to a spokesperson for Wenig.

Baugh, whom prosecutors described as the mastermind of the scheme, at one point recruited Harville to go with him to Boston to spy on the Steiners, authorities said. Baugh, Harville and another eBay employee went to the couple’s home in the hopes of installing a GPS tracker on their car, prosecutors said. The trio found the garage locked, so Harville bought tools with a plan to break in, prosecutors said.

Harville’s attorneys have said he had no involvement in or knowledge about the threatening messages or deliveries sent by his colleagues.

Baugh’s lawyers have said their client faced relentless pressure from Wenig and other executives to do something about the Steiners. Baugh alleged he was then pushed out by the company when “an army of outside lawyers descended to conduct an ‘internal investigation’ aimed at saving the company and its top executives from prosecution.”