Final eBay Cyberstalking Criminal Defendant Sentenced; Judge Urges Mediation In Civil Case
UPDATE 8-7-24
eBay's Q2 2024 10-Q filed with the SEC reveals an interesting omission - despite the amount accrued for possible legal losses going from $64M in Q1 to $67M in Q2, eBay only mentions the ongoing EPA case, but not the cyberstalking lawsuit that was included in 4 previous prev 10-Qs.
Liz Morton
Could a settlement within previously accrued amounts be imminent?
UPDATE:
Ex-eBay Senior Manager Special Operations, Brian Gilbert has been sentenced to time served with one year of supervised release and special instructions not to have any contact with the victims, Ina and David Steiner, as well as the $20,000 fine requested by the US Attorney's Office.
In pronouncing the sentence, Judge William G. Young had strong words for both Gilbert and eBay, questioning how Gilbert could commit these crimes with his extensive law enforcement background.
The question I'm left with is how could you do this? How could you do this? You achieved the important position you held with eBay precisely because of your exemplary law enforcement skills.
Whatever happened to the moral compass that led you to that position? The best I can do is because of a warped corporate culture.
If corporations are so powerful, and their perceived needs so powerful as to ride roughshod over the life's work of people of your background and training and integrity, the country has much to fear from corporations.
And in the status conference in the civil case, it appears the major sticking point in settlement negotiations is whether or not the plaintiffs will be able to seek punitive damages, according to Nate Raymond from Thomson Reuters.
During a hearing before U.S. District Judge Patti Saris, eBay counsel Jack Pirozzolo of Sidley Austin said the company was seeking to settle the lawsuit.
But he said it became clear during a mediation last month that the parties needed guidance from Saris on a key issue if they were to resolve the case: Whether the Steiners are entitled to seek punitive damages.
Under Massachusetts law, the Steiners would not be entitled to seek punitive damages against eBay, but the Steiners' lawyers, led by Andrew Finkelstein of Finkelstein & Partners, contend California law would govern that damages claim.
"Is this the barrier to settlement?” Saris asked.
"I would not say it's the only barrier but I would say that it became a significant issue in settlement discussions,” Pirozzolo said.
The eBay cyberstalking criminal case is finally coming to a close with the sentencing of ex-Senior Manager Special Operations, Brian Gilbert set for July 18th after multiple delays due to an inoperable cancer diagnosis.
The bizarre corporate plot unfolded in the summer of 2019, targeting journalists Ina and David Steiner, of EcommerceBytes, and seeking to unmask the identity of Fidomaster/unsuckEBAY, a frequent commenter and source who also sparked the ire of top executives at the company.
Court records revealed sordid details of the harassment that included disturbing deliveries of live insects, bloody pig masks and funeral wreaths as well as threatening messages, doxxing that ultimately escalated to in-person stalking and an attempted break-in at the hands of high-level eBay security personnel.
Liz Morton
Senior Director Security Jim Baugh, Director of Global Resiliency David Harville, Security Manager Philip Cooke, Senior Manager of Global Intelligence Stephanie Popp, Global Intelligence Manager Stephanie Stockwell, and Security Analyst Veronica Zea were all also charged, pleaded guilty and have been sentenced for their roles in these crimes.
The Steiners have also filed a civil lawsuit against the seven criminal defendants plus eBay Inc., ex-CEO Devin Wenig, ex-Communications Chief Steve Wymer, ex-SVP Global Operations Wendy Jones, and security company Progressive F.O.R.C.E Concepts (PFC), alleging direction and support for the harassment came from the very top of eBay's c-suite.
In pre-sentencing filings this week, prosecutors said Gilbert is among the more culpable of the seven convicted codefendants due to his visibility into the threats, deliveries, and surveillance and noted his actions would normally require 37 to 46 months in prison, a fine of $15,000 to $150,000, and a three-year term of supervised release under federal sentencing guidelines.
But because of his medical issues and likely eligibility for compassionate release, the US Attorney's Office is instead only requesting a sentence of time served with one year of supervised release and a $20,000 fine.
Gilbert's attorney has pleaded for additional leniency with no fine imposed, saying the "tragic circumstances" of his terminal diagnosis has put his family in dire financial straits.
While Gilbert says he considered eBay a "retirement job" after a 27-year career with the Santa Clara Police Department, he conveniently leaves out that both he and codefendant Cooke were allowed to keep their $200,000+ police pensions despite being convicted of multiple federal felonies - a detail which would seem to be relevant to determining the actual financial burden a possible fine might impose.
Gilbert's record of "outstanding police work and leadership skills" was referenced frequently in the filings, seeking to portray him as an honorable public servant who was simply overwhelmed when the job turned out to be more time-consuming, demanding and stressful than he had imagined, without the clear boundaries and rules he was used to in his previous career.
He was particularly proud of his work with the San Francisco 49ers starting in 2012 and credits connections he made at Levi's Stadium with landing him the eBay gig after being approached by an eBay executive about the job in 2019.
Gilbert doesn't name that executive specifically, but it's likely to have been Dan Cory, who was VP of Security for the 49ers before joining eBay and directly in the middle of the chain of command between Gilbert and Cooke and Jim Baugh at the time the cyberstalking events occurred.
Cory was promoted to take over Baugh's position in the wake of this scandal, with eBay's internal investigation saying he was "well regarded and favorably vetted by an independent security firm in 2020" while apparently overlooking the role he may have played in recruiting and supervising members of security staff who were directly involved in this criminal conduct.
Cory served as Sr Director Global Security and Resiliency until August 2021, when he left to return back to the 49ers as Chief Security Officer.
The recent filings also revealed new details about Gilbert's personal involvement in the crimes, including drafting threatening messages sent to the Steiners, tagging their fence with the word Fidomaster, and developing and implementing a "White Knight Strategy" aimed at offering to help the Steiners in order to gain their trust and assistance in outing Fidomaster/ unsuckEBAY.
Baugh was desperate to identify and silence Fidomaster/unsuckEBAY as pressure mounted from Wenig, Wymer and Jones to "solve the problem" after Chief Legal Officer Marier Oh Huber informed them that there wasn't a strong case to take action against the account or get Twitter to kill it.
He even went so far as to create a fake Twitter account purporting to be a disgruntled ex-eBay employee who claimed to have damning video evidence of execs behaving badly in a failed attempt to draw out unsuckEBAY and establish a connection to the Steiners.
For those who have looked on these events with horror, wondering what could have possibly motivated eBay executives and security personnel to engage in such outrageous behavior, Assistant U.S. Attorney Seth Kosto very clearly states:
The purposes of the harassment and intimidation campaign included, among others, distracting the Steiners from publishing the Newsletter, altering the Newsletter’s coverage of eBay, and gathering information, including the identity of Fidomaster, that eBay could use to discredit the Steiners, the Newsletter, and Fidomaster.
Interestingly, Gilbert contradicts some of his codefendants by claiming the graffiti on the fence was his idea alone - an impulsive action taken out of frustration with both the Steiners and Fidomaster/unsuckEBAY.
Meanwhile, the ongoing civil lawsuit continues with an unexpected twist as the Steiners fired their previous counsel, Rosemary Scapicchio, in May and hired Boston-based personal injury firm Diller Law to represent them going forward - giving their new lawyers little time to get up to speed in the case.
Neither the Steiners nor Ms. Scapicchio have publicly commented on the sudden switch up, but it may be noteworthy that the change occurred shortly after the film festival debut of "Whatever It Takes", a documentary about the cyberstalking events featuring exclusive access and interviews with the Steiners.
Interviews
The film was produced by Allyson Luchak and Ben Travers, who had previously worked with Scapicchio on Trial 4, a documentary series about the fight to free Sean Ellis from wrongful conviction after serving 22 years for the murder of a Boston police officer which he did not commit.
Whatever It Takes also had backing from Concordia Studio, which is funded by Apple co-founder Steve Jobs' widow, Laurene Powell Jobs, who has previously collaborated with eBay founder Pierre Omidyar on various philanthropic and media endeavors.
In fact, Whatever It Takes executive producers Jonathan Silberberg and Nicole Stott from Concordia Studio both worked directly with Omidyar's Luminate Media in 2020 to produce A THOUSAND CUTS - a documentary about the CEO/Founder of news site Rappler, Maria Ressa, and the fight for press freedom in the Philippines.
Strangely, the Omidyar Network website appears to have recently removed previous posts mentioning their financial involvement and support of the news site after the Philippine Securities and Exchange Commission revoked Rappler's certificates of incorporation and held that the issuance of Philippine Depositary Receipts (PDRs) to Omidyar Network were in violation of the country's Constitution.
Omidyar's public positions on free speech and press freedom may strike some as particularly ironic, given the obvious correlations and implications raised in the cyberstalking case, with one judge going so far as to say the actions undertaken by eBay security personnel were "abhorrent to First Amendment values."
Liz Morton
Engaging with a production team that has ties to Omidyar-backed projects/ organizations could raise questions about conflicts of interest or bias and seems like an odd choice, given the traumatic experiences of the victims and ongoing litigation involved.
While Omidyar stepped down from actively serving on eBay's Board of Directors in the wake of this scandal, he retains the title of Director Emeritus and is still one of eBay's largest individual shareholders.
That honorary title may not come with voting rights, but that doesn't necessarily mean Omidyar couldn't still exercise some degree of influence at the company.
Notably, Shripriya Mahesh was appointed to eBay's BOD in 2023 after previously rising to VP Product Management and Product Strategy in 2006, then joining Omidyar's First Look Media as Head Of Product in 2013 and later becoming Partner Emerging Tech at Pierre's "social change venture", Omidyar Network.
Liz Morton
While serving on the eBay Board of Directors, Mahesh has also actively maintained her position as Founding Partner of Spero Ventures - a for-profit venture fund spunout from Omidyar Network in 2018 with Pierre Omidyar as its sole limited partner at the time.
The degree to which Omidyar might still be involved with eBay behind the scenes and his past connections to Lina Khan and others occupying top spots at the FTC could also come under increased scrutiny as the deferred prosecution agreement eBay signed with the Department Of Justice in this case places the company under 3 years of enhanced compliance monitoring, with a curious focus on mergers and acquisitions.
Liz Morton
Judge Patti Saris has been strongly urging the parties to engage in mediation to work toward settling at least some of the civil claims, saying in a recent hearing "I don't see any way in which a jury could decide this with the number of defendants...I just don't have a big enough courtroom for that number and it's confusing to a jury."
Saris has suggested if the lawsuit goes to trial, the proceedings may need to be split up, with claims against eBay, the c-suite executives, and the named criminal defendants tried in seperate groups in an effort to address the logistical challenges posed by such a complex case.
A mediation session held on June 17th was ultimately unsuccessful, but the parties have asked Judge Saris to hold a status conference on July 18th that they say "may be helpful to the settlement process."
The plaintiffs are also moving ahead with discovery, seeking to depose several of the defendants, including Jim Baugh, who is still in federal custody and plans to invoke his 5th Amendment right against self-incrimination.
The Steiners have sought access to information regarding Baugh's former work for the CIA, alleging if he was purposely hired by eBay for specific skills and experience he may have gained in his past government intelligence work, that could be relevant to their claims seeking to hold the company and executives accountable for the crimes committed by their employees.
Eriq Gardner
Baugh had previously been forthcoming about his past, even going so far as to reveal code names and other sensitive details in pre-sentencing filings in 2022, but the government has since had those records sealed and directly inserted themselves into the litigation, arguing they have a legitimate national security interest to review discovery and evidence to prevent any further unauthorized disclosures.
The civil case is still currently set for a 2025 trial date, but that could change if today's status conference opens the door to move some or all of the claims toward settlement.
Stay tuned for updates and remember, Value Added Resource subscribers get exclusive access to our eBay cyberstalking case document archive - sign up for free today!
