2 Plead Guilty to Fraudulent Practices in Internet Art Auctions

Two men accused of selling fake masterpiece paintings on an online auction site and inflating the bid prices pleaded guilty Tuesday to fraud charges in federal court.

Kenneth Walton, 33, pleaded guilty to three counts of wire fraud and four counts of mail fraud. Scott Beach, 31, pleaded guilty to one count of wire fraud and three mail fraud charges.

Walton, a Sacramento attorney, was accused of having nearly 20 different EBay log-in identities that he used to sell paintings and bid on paintings. Those log-in names hosted more than 250 auctions, according to court documents.

Beach, of Lakewood, Colo., is also accused of having many log-in identities that he used to drive up auction prices.

Both men face up to five years in prison and $250,000 fines on top of restitution payments. If they cooperate with the federal investigation, they could be sentenced to probation.

A third man, Kenneth Fetterman, 33, of Placerville is a fugitive, prosecutors said.

Fetterman has been charged with fraud and money laundering. He could face 20 years in prison and a $500,000 fine if convicted.

All three men together are thought to have hosted about 1,000 auctions from late 1998 to May 2000.

The fraudulent bidding, known as shill bidding, is forbidden by San Jose-based EBay Inc. and is generally illegal in traditional auctions.